Iran war: How long before Gulf nations stop pumping oil?

Iran War: How Long Before Gulf Nations Stop Pumping Oil?

Oil prices climbed to nearly $120 per barrel after Israeli strikes on Iran’s energy infrastructure and the disruption of the Strait of Hormuz. The attacks, which escalated the 10-day-old conflict, caused tankers to halt and Gulf oil facilities to face damage, prompting producers to rely on limited storage to keep operations running.

The price of crude reached $119.50 (€103.30) on Monday, only to retreat to around $100 later. As tensions rise, energy markets are bracing for further risks, with Iranian strikes and the closure of Hormuz—nearly one-fifth of global oil traffic—creating widespread uncertainty.

Iran’s de facto blockade of the Strait of Hormuz, a vital waterway between Iran and Oman, has disrupted commercial shipping. Shipping analytics firm Kpler reported that nearly all traffic through the route has been halted, turning the strait into a critical chokepoint for energy trade. Its closure is viewed as a severe threat to global supply chains.

Despite alternative export routes, Gulf nations are struggling with storage limits. Saudi Arabia and the UAE have managed to divert some shipments via the Red Sea and Gulf of Oman, but these routes account for just a third of the usual flow. According to JP Morgan, the region’s total storage capacity for oil is about 343 million barrels, which would last only 22 days under current conditions.

“The conflict has forced Gulf producers to operate with diminishing margins, as storage space dwindles and output is threatened by the strait’s closure,” said a report from Kayrros, a Paris-based environmental intelligence company.

伊拉克, with just six days of storage, has likely exhausted its reserves, leading to a 1.5 million barrels per day reduction in output. Rystad Energy warned that Iraq’s remaining oil fields could face an imminent shutdown, exacerbating the crisis. Meanwhile, Saudi Arabia, which had 66 days of buffer stock on February 28, may only have seven to nine days before being forced to cut production.

Restarting production after a halt can take weeks, with prolonged shutdowns risking equipment failures or geological complications. A full stoppage of Gulf exports would push prices to new heights, as the region accounts for roughly one-third of the world’s seaborne crude.

“Crude production appears to be under pressure, indicating potential disruptions in the Gulf’s energy output,” noted Qatar’s Energy Minister in an interview with the Financial Times on Friday.

With the conflict intensifying, the question remains: how long before Gulf nations are forced to halt oil production entirely?