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Gulf Output Recovery to Take Months Even if Hormuz Reopens Soon, Says WoodMac

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The restoration of Middle Eastern oil production will take months, even if exports return to normal soon, Wood Mackenzie analysts toldin an interview.

The analysts warned that long-term damage to reservoirs and logistics will slow a return to energy market normalcy until many weeks after the geopolitical backdrop stabilizes.

An estimated 11 million barrels per day of upstream production is currently 'shut in' across the region due to the conflict, excluding Iran, where additional disruption is beginning to emerge.

While public attention remains fixed on a potential diplomatic breakthrough to reopen the Strait of Hormuz, energy analysts stress that markets will not normalize the day after.

Shipping logistics will be the primary constraint for several weeks as operators sort out war-risk insurance, clear full storage tanks, and wait for empty vessels to arrive. After that upstream production will become the next hurdle, the analysts said.

Fraser McKay, Head of Upstream Analysis at Wood Mackenzie, said in an interview withon Thursday that some heavily-affected fields are currently producing a mere 20% of normal output.

While initial recovery from major fields will be fast enough to meet early export volumes, a return to baseline capacity will take significant time, he added.

McKay estimates that severely impacted operations will likely recover to roughly 70% of pre-crisis output after three months, and it will take six to nine months to claw back to about 90% of baseline production.

Operators face rigid technical limits, since ramping up production too quickly risks causing reservoir pressure to drop permanently or it could trigger a catastrophic entry of water.

The recovery process is expected to be uneven across the Middle East, dictated by onshore storage capacity and the technical characteristics of production assets. Restart times will also increase the longer assets are disrupted.

"it's not just a case of switching the production on. It's A carefully managed process. It takes time and the challenges that each country, each field, and each well faces are all unique," McKay said.

While Saudi Arabia and the UAE maintain roughly a month's worth of storage buffer to manage a staggered restart, Kuwait and Iraq are operating with less than two weeks of storage safety cushion.

Iraq faces the steepest uphill battle of all. Its recovery path is severely complicated by operational complexity, underlying financial pressures on the government, and deep political fragmentation.

Analysts emphasize that the longer the shutdown persists, the more challenging it becomes for places like Iraq to safely manage and restore its production without causing lasting reservoir damage.

These technical warnings come amid frantic diplomatic maneuvering, with US and Iranian negotiators reportedly closing in on a Memorandum of Understanding that would extend the current ceasefire for 60 days.

The proposed deal aims to guarantee "unrestricted" passage for commercial vessels through the Strait of Hormuz without the payment of tolls to Tehran.

Market reaction will likely be guarded though, after a roller coaster ride of supposed breakthroughs and US President Donald Trump's claims of Iran's eagerness for a peace deal with few signs of corresponding deeds.

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