MUSCAT, OMAN - MARCH 22: People celebrate Eid and watch oil tankers sail into Muscat Anchorage on March 22, 2026 at Sultan Qaboos Port in Muscat, Oman.President Donald Trump had threatened to attack Iran's energy infrastructure if it did not end its de facto blockade of the Strait of Hormuz by just before midnight GMT of March 23. A subsequent statement from President Trump said the U.S. and Iran had held "very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East," and that he would postpone any attacks on Iranian energy infrastructure for five days. Maritime traffic through the strait, which conveys about 20% of the world's oil and gas, has mostly come to a halt after the joint U.S.-Israeli war with Iran that began on February 28. (Photo by Elke Scholiers/Getty Images)

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One of the big concerns facing the oil market revolves around the ability of Gulf oil producers to restore oil supply once the Straits of Hormuz re-opens. Because of full storage tanks, most have had to shut in production—estimated at 8 to 10 million barrels per day (mb/d). The concern is that production shut-ins result in damage to the wells or at least require some remediation to restore to pre-war production levels. The International Energy Agency has suggested it might take 2 years for production to recover, which would keep oil prices elevated for an extended period. Saudi Loss of energy output in MidEast will take about two years to recover, IEA says | Reuters

This matters because any prolonged outage will not only have severe economic impacts, but the length of the outage will determine appropriate responses by the energy industry. Most oil companies have been reluctant to increase upstream investment despite current high prices out of caution as to their persistence. Advocates of alternatives, on the other hand, believe that an extended outage would make them more attractive. The New York Times quoted one as saying, “With solar, ‘you can make a major dent in your fossil fuel reliance in a matter of a couple of years.” Opinion | Remember the Oil Shocks of the ’70s? This Is Going to Be Worse. Much Worse. - The New York Times

The suggestion that Iranian oil wells would ‘explode’ and be permanently damaged is not a serious one, but that doesn’t mean production can be switched on and off like a light bulb. The primary concern is that a shut-in well would experience water encroachment such that restarting would see a higher water cut than previously. This is apparently a problem especially for carbonate reservoirs, such as Iran’s.

Historically, large-scale shut-ins due to political upheaval have been difficult to restore, the classic case being Iran in 1979. Pre-revolutionary production was 6 mb/d and it took a decade to reach half that level for an extended period. Similarly, after the second Gulf War, Iraq took most of a decade to restore production, although now it is producing at record levels.

But importantly, both of these cases represent a failure of political leadership, not physical constraints or technical obstacles and as such they are not informative now. And engineers have repeatedly proved able to accomplish more and faster than expected when challenged. For example, after Saddam Hussein sabotaged the Kuwaiti oil fields, estimates of the time to put the fires out ranged from one to two years to five to seven years. AFTER THE WAR: Another War Begins as Kuwaiti Oil-Well Fires Threaten Region's Ecology; Blazes Could Burn for Two Years - The New York Times In the actual event, it took a mere nine months to extinguish the blazes. Kuwait Oil Field Restoration - Bechtel

The attack on the 7 mb/d Abqaiq oil processing plant in Saudi Arabia is another prime example. For many years, people had warned that it was the most vulnerable facility in the industry, with one expert saying, “a successful attack on Abqaiq would be akin to a massive heart attack for the oil market and global economy." Major Saudi Arabia oil facilities hit by Houthi drone strikes | Saudi Arabia | The Guardian

The operative word, of course, is ‘successful.’ The September 2019 attack by up to two dozen drones saw numerous hits on the facility, mostly storage tanks but an estimated three hitting oil processing trains. Reports of the time for repairs ranged from a few days to weeks. In practice, it took less than two weeks and October production was virtually the same as in August.

Some have pointed to shut-ins of U.S. shale production, as during the pandemic (Permian production in the figure below), when production dipped by nearly 1 mb/d and took about 15 months to recover. In all likelihood, much of the reduction that was not restored reflected lower drilling rates rather than damage to the wells due to inactivity.

And shale geology is not comparable to conventional wells. Wells that rely on steam injection, particularly heavy oil in Canada, need to have temperatures maintained while shut down or their production will be slow to recover. And if gas and water injection is ceased, reduced pressure can mean restoration requires additional time.

But there have been other instances where shut-in production was brought on more or less immediately, with Saudi Aramco being the clearest case. The country has often raised or lowered production abruptly in response to market developments. Most notably, during the Gulf Wars the company raised production by 2 mb/d, in the first war within one month, in the second, within 3 months, as the figure below shows.

Since 1990, the Saudis have raised production by more than 1 mb/d in two months more than seven times, suggesting a two year timeline to restore the 3 mb/d of production now shut in is too pessimistic. For other producers (Iraq, Kuwait, and the U.A.E.) with production shut in by lack of storage, not much more effort seems likely, especially if the Straits are not closed beyond a few months.

The precise end of the blockade is unclear and the post-crisis path of prices cannot be predicted with certainty. The restoration of shipping will see a quick dip in prices, but it could take several months to fall to pre-war levels even with a quick restoration of Gulf oil production. Still, those investing as if production will be offline for up to two years and prices elevated for a similar time are likely to be disappointed, just as many were in the early 1980s thinking prices, having tripled, would only go higher. Tens of billions were lost then, especially on synthetic fuel plants, but hopefully not as much will be wasted this time. Still, it wouldn’t be the first time the lessons of history were ignored.