Goldman Sachs Group indicated that crude oil production in the Persian Gulf, disrupted by the conflict involving Iran, will require "months" to substantially recover, assuming the Strait of Hormuz fully reopens and no further attacks occur.
Analysts, including Daan Struyven, wrote in an April 23 report that the estimated crude oil production for April has already decreased by approximately 1.45 million barrels per day, a reduction of 57%.
Within this total, Saudi Arabia's supply is projected to fall by 400,000 barrels per day; Iraq's by 300,000 barrels per day; Iran's by 250,000 barrels per day; the UAE's by 270,000 barrels per day; Kuwait's by 120,000 barrels per day; and Qatar's by 100,000 barrels per day.
They stated, "The longer the actual blockade of the Strait persists, the more prolonged the production cuts will be, and the slower the recovery in production is likely to be."
This outlook reflects factors such as potential additional maintenance requirements for oil wells, slowed procurement of consumables like pipelines, and transportation constraints.
Nevertheless, achieving a "robust recovery" hinges on the limited physical damage to oil fields, Saudi Aramco's forecast of its ability to increase production relatively quickly, and the potential activation of idle capacity by Saudi Arabia and the UAE.
During the ramp-up phase, transportation and well flow rates will be key constraints, dependent on pipeline capacity, the availability of materials and labor, and the complexity of the oil reservoirs.
If the Strait remains closed for an extended period, the final stage of recovery "would take significantly longer and might not even be fully achievable."
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