Middle East crude and condensate supply disruptions climbed to 870 million barrels as of May 15, up roughly 90 million barrels over the week, as storage constraints forced deeper production shut-ins in Iran, Kpler analyst Victoria Grabenwoger said in a Monday note.
The outages are expected to surpass 1 billion barrels later this month as the regional supply crisis intensifies amid the ongoing Strait of Hormuz stalemate.
Middle Eastern crude and condensate production outages rose to over 12.9 million barrels per day this week from 12.65 million b/d previously, driven largely by further downward revisions to Iranian supply.
Kpler said the US naval blockade has effectively halted Iranian crude exports, with no crude cargo loadings observed since May 6 and no tanker berthing activity recorded at Kharg Island, the country's main export terminal.
Iran has increasingly relied on domestic crude storage, with onshore inventories climbing to nearly 74 million barrels as of May 15, up almost 10 million barrels since late April. Kpler said both onshore storage and floating storage capacity appear close to saturation.
As a result, Iranian crude and condensate production is now estimated to average about 2 million b/d in May, roughly half pre-conflict levels of 4 million b/d. Output could fall further if export restrictions persist, Kpler said.
Saudi Arabia remains the largest contributor to regional shut-ins, with close to 3 million b/d offline, followed by Iraq at 2.8 million b/d.
Iranian outages are estimated at 2.17 million b/d, while Kuwait and the UAE account for roughly 1.75 million b/d and 1.5 million b/d, respectively.
Kpler's base-case scenario assumes a gradual reopening of the Strait of Hormuz beginning in July, paving the way for a phased recovery in Middle Eastern oil production.
Saudi Arabia and the UAE are expected to restore output the fastest, potentially recovering most production within seven to eight weeks.
However, Iraq and Kuwait are likely to require three to four months to fully restart medium-heavy oil fields due to the technical complexity of pressure rebalancing, artificial lift reactivation and water injection management.
Recovery in Iran and Qatar could take longer due to damage to gas-processing and condensate infrastructure, Kpler said.
Overall, the consultancy estimates that 70%-80% of shut-in Middle Eastern production could return within weeks of a restart, but a full recovery to near pre-war production levels across the region may take up to five months.