Goldman Sachs: Most of the Gulf's oil production will recover within months after the reopening of the strait

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Goldman Sachs reports that the significantly reduced Gulf oil production due to the Iran conflict could mostly recover within a few months after the Strait of Hormuz fully reopens, but it may also take longer. The firm estimates that in April, about 14.5 million barrels of oil per day were shut in the Gulf region, accounting for approximately 57% of pre-war supply, mainly due to preventive shutdowns and inventory management rather than physical damage to oil fields. Goldman Sachs states that recovery prospects vary by country, with Iran and Iraq facing greater risks due to reservoir characteristics, infrastructure challenges, and sanctions, while Saudi Arabia may be able to increase production more quickly. The firm notes that the average forecast from external agencies indicates Gulf oil producers could restore about 70% of the shut-in production within three months and about 88% within six months. However, it also warns that long-term closures could increase the risk of lasting damage to supply.

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