Iran war: How long before Gulf nations stop pumping oil?
Iran War: How Long Before Gulf Nations Halt Oil Production?
Oil prices surged past $120 following attacks on Iran’s energy infrastructure and the blockade of the Strait of Hormuz. The strikes, which targeted key facilities and disrupted shipping, triggered immediate concerns in global energy markets. Brent crude reached $119.50 (€103.30) per barrel on Monday but later retreated to around $100. This volatility reflects the escalating tensions in the 10-day-old conflict, which has drawn multiple nations into its orbit.
With tankers immobilized and Gulf oil facilities targeted, producers are now facing limited storage capacity to sustain output. The conflict’s intensification raises fears of broader disruptions to energy infrastructure in the Middle East, where Iranian strikes and the closure of the world’s most critical oil shipping route have already damaged key sites.
The Strait of Hormuz, a narrow waterway between Iran and Oman, serves as a vital link between the Persian Gulf and the Arabian Sea. Its closure has halted nearly all commercial traffic, according to Kpler, a shipping analytics firm. As the region accounts for about one-third of global seaborne crude, the disruption threatens to send prices soaring further.
Gulf oil-producing nations—Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, and Bahrain—have been directly impacted by the conflict. Iran’s attacks on energy sites, airports, and US military installations sparked accusations of “treacherous” behavior and raised the specter of military retaliation. Meanwhile, the closure of the Strait has forced producers to rely on dwindling storage options to maintain operations.
According to JP Morgan, the Gulf states maintained a 22-day storage buffer as the conflict escalated on February 28. However, this assumes some exports could be rerouted via alternative paths. Rystad Energy estimates that Saudi Arabia may have only seven to nine days of operational flexibility before forced output cuts. Qatar’s Energy Minister, speaking to the Financial Times on Friday, noted that crude could…
Oil and LNG tankers stranded in the Strait highlight the logistical challenges. While Saudi Arabia redirected shipments to the Red Sea port of Yanbu, the UAE rerouted some exports through Fujairah, itself damaged by Iranian strikes. These alternatives cover just a third of the usual flow, underscoring the fragility of the region’s energy supply chain.
Restarting production after a temporary halt could take days to weeks, with prolonged shutdowns risking equipment failures or geological complications. Iraq, which had just six days of storage, has likely depleted its reserves, leading to a 1.5 million barrel-per-day reduction in output last week. Rystad Energy warned that Iraq’s remaining oil fields face an imminent, near-certain shutdown.
With diminished storage capacity, Gulf producers are racing against time. If the Strait remains closed, the region’s ability to maintain output could be severely tested. The situation raises the question: how long before the Gulf’s energy exports come to a standstill?
