Some producers in the Middle East are likely to struggle to restore oil output to pre-conflict levels by the end of 2027, even if trade patterns return to normal by early next year, the US Energy Information Administration says according to Reuters.
The EIA estimated about 5.5 million barrels per day of Middle East oil output, or over 5 per cent of global consumption, was shut-in during July, the agency said in its short-term energy outlook (STEO) for August.
The EIA now expects flows through Hormuz to be severely constrained through August after renewed attacks on vessels in recent weeks, but it assumes that shipments will start to slowly increase in September.
Even if most Middle East oil output and global trade recover to pre-conflict levels by early 2027, about 600,000bpd of production from the region will be shut-in through the end of 2027, the EIA said in the August STEO.
