Analyst: Middle East oil wells face technical challenges in restarting, but the risk of large-scale permanent damage is low

BlockBeats News, June 24th — With the reopening of the Strait of Hormuz, countries such as Iran, Saudi Arabia, the UAE, and Iraq are gradually preparing to restart some oil wells that were shut down during the conflict. The market is watching whether the wells can smoothly recover production after long-term shutdowns, and whether permanent damage might occur.

Analysts point out that shutting down and restarting oil wells involve complex engineering operations. Long-term shutdowns may lead to changes in underground pressure, equipment corrosion, and reduced production capacity, but the industry has mature experience in dealing with these issues. Macquarie Group global oil and gas strategist Vikas Dwivedi said there is still uncertainty about the actual performance after restarting oil wells.

In response to US President Trump's previous warning that shutdowns could cause oil fields to "explode" and suffer permanent destruction, JPMorgan global head of commodities strategy Natasha Kaneva stated that the relevant risks are likely exaggerated. Historically, whether during the massive shutdowns in 2020 due to the pandemic, or OPEC’s production cut measures, Middle Eastern oil-producing countries have not seen significant long-term losses in production capacity.

Analysts believe that although the restart process requires gradually restoring underground pressure balance through methods such as water and gas injection, and coordinating the synchronous operation of multiple oil fields in the region, the likelihood of large-scale infrastructure damage or permanent production loss is low.