GULF crude oil production could largely recover within a few months of the Strait of Hormuz reopening, Goldman Sachs research said in a report. However, it added that a complete return to pre-war levels may take longer and the crude oil production is likely to face heightened risks if the closure of the crucial waterway and tensions in West Asia continue for a longer period.
The research wing of the investment bank estimated that Gulf output went down by 14.5 million barrels per day (mbd), or 57 per cent, from pre-war levels. In its latest research note, Goldman Sachs said a swift recovery is possible, given there are no renewed strikes on oil assets and a full, safe reopening of the Strait in the coming months. However, the last leg of the ramp-up could be prolonged and may not fully materialize if the waterway remains closed for an extended period.
The speed of recovery will hinge on transport and well flow rates. Once the Strait reopens, the key constraints are likely to be pipeline capacity, the availability of empty tankers to clear previously produced oil, and the mobilization of materials and workers for field workovers. Goldman estimates that available empty tanker capacity in the Gulf has fallen by about 50 per cent, or 130 million barrels, since the start of the conflict.
ANI
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