Why Middle East oil and gas recovery could take months despite ceasefire

Dubai: The Middle East’s oil and gas recovery is set to stretch over months — and in some cases years — even as a ceasefire opens a limited path to resume flows.

Around 11 million barrels per day of oil production remain shut in across the region, with recovery dependent first on restoring shipping through the Strait of Hormuz, according to Wood Mackenzie.

“A ‘workable system’ of transit and shipowner confidence… is essential,” said Alan Gelder, senior vice president for refining, chemicals and oil markets at Wood Mackenzie.

Tanker movement remains uncertain despite incentives to resume transit, while ballast vessels may delay entry to avoid getting trapped if conflict resumes, and onshore inventories cannot be quickly loaded due to port constraints, according to Gelder, while adding that shipping logistics will cap recovery for several weeks before upstream production becomes the limiting factor.

Uneven restart

Storage capacity varies widely, from about a month in the UAE and Saudi Arabia to under two weeks in Iraq and Kuwait, while more than half of pre-war output could return before logistics ease and full recovery timelines will differ by country, Wood Mackenzie revealed.

Even under stable conditions, Iraq could take six to nine months to return to previous output levels due to reservoir and operational constraints, said Fraser McKay, head of upstream analysis at Wood Mackenzie.

Rushing production risks long-term damage. “Operators… to restore production too rapidly, will risk doing more long-term damage,” McKay said.

War damage deepens

The conflict has damaged more than 40 energy assets across nine countries, according to Fatih Birol, executive director of the International Energy Agency, raising the prospect of prolonged supply chain disruptions.

“You can’t just push the pause button,” said Jim Krane, a fellow at Rice University’s Baker Institute. Damage to parts of Qatar’s Ras Laffan LNG complex could take up to five years to repair, according to Saad Sherida Al-Kaabi, chief executive of QatarEnergy.

Gas recovery lags oil

Gas markets face a slower rebound:

• 14 LNG cargoes remain stranded in the Gulf

• Qatar’s Ras Laffan restart could extend to late summer

• Damaged capacity may reduce long-term output

A full restart of the facility’s 12 trains could take until the end of August, assuming operations resume soon, said Tom Marzec-Manser, head of gas and LNG analysis at Wood Mackenzie.

“Outside LNG, domestic gas infrastructure in the UAE has been harder hit than oil, and that recovery process could require longer-term repair work,” he added.

Refinery constraints

As per analyst and industry expert estimates, restart timelines vary:

• Small oil fields: two to three weeks

• Larger fields: up to five weeks

• Refineries: 10 to 15 days if no major damage

Extended shutdowns risk corrosion, wax buildup, and pressure imbalances, complicating restarts, said Oklahoma-based oil industry veteran Matt Randolph.

“The priority is to keep the fields running,” said Aditya Saraswat, director of research for Middle East and North Africa at Rystad Energy.

Near-term outlook?

Even as tankers begin to return, the restart of Middle East energy flows remains constrained by a layered sequence of restoring shipping, clearing storage and gradually ramping up production, according to analysts at Wood Mackenzie.

1. Secure shipping lanes

2. Clear storage bottlenecks

3. Gradually restore production

4. Repair damaged infrastructure

Each stage introduces delays. The result: a staggered recovery that may restore flows in phases — but leaves full capacity still distant.