Middle East Oil Output Climbs as Regional Stability Returns

Rystad Energy anticipates that shut-in production will plummet to below 2 million barrels daily by late September, a sharp contraction from the 9.6 million barrels currently sidelined. This recovery has gained momentum, with 2 million barrels returning to the market in just three weeks. Iran leads this resurgence due to limited upstream infrastructure damage, while Kuwait has moved to clear all force majeure notices and resume July cargo tenders. Saudi Arabia is also scaling up, targeting a record 4.5 million barrels per day through the Yanbu terminal this month.

Aditya Saraswat, Rystad Energy’s MENA research director, emphasized that the regional supply picture is brightening significantly. Iran’s output is expected to climb from 2.4 million barrels per day to 3.1 million by August, potentially reaching 3.3 million by year-end, contingent on the United States extending current sanction waivers. Despite the optimism, consultancy experts maintain that the stability of the Strait of Hormuz remains the primary variable for sustaining these production gains.