Goldman Sachs estimates that crude oil output from the Gulf has fallen by roughly 14.5 million barrels per day, or about 57% compared with levels before the conflict began. The bank cautions that even if the Strait of Hormuz reopens, producers may face a lengthy and uneven path back to prior production rates.
In a client note, analyst Daan Struyven said production could rebound mostly within a few months after reopening, but only if several critical conditions are met. Key requirements include no renewed strikes on oil infrastructure and a full, safe reopening of the Strait. Even with those conditions, Goldman highlights structural constraints that could slow recovery.
Goldman points to transportation capacity and well flow rates as the chief bottlenecks. The bank estimates that available empty tanker capacity in the Gulf has fallen by around 50% - roughly 130 million barrels - since the war began. That decline in tanker availability could limit how rapidly crude can move from fields to market, even if wells are brought back online.
Goldman also warns that the duration of the closure matters: "The longer the closure, the slower the production ramp." The firm explains that forced curtailments can create reservoir complications that require intervention and workover operations before wells can resume normal flow. Procuring depleted inputs, such as drill pipes, could add further delays to bringing wells back into service.
On the more optimistic side, Struyven noted limited publicly reported physical damage to oil fields and cited constructive comments from Saudi Aramco's president and CEO in March indicating a potential for a relatively quick ramp-up. The bank also observes that Saudi Arabia and the UAE have historically deployed spare capacity to help stabilize markets.
Despite those constructive signals, Goldman stresses substantial tail risks. An average of external forecasts from the EIA and IEA, highlighted by the firm, suggests a recovery of only 70% of lost production after three months of reopening and 88% after six months. Goldman adds that the risk of significant scarring to oil production capacity would increase if hostilities resumed - a scenario the firm treats as a material risk, though not its base case.
Implications
Goldman's analysis underscores that reopening a chokepoint like the Strait of Hormuz is a necessary but not sufficient condition for a swift restoration of Gulf crude output. The combined effects of reduced tanker availability, technical well issues and procurement needs mean markets should expect a potentially protracted recovery period.