PNN – A Qatari media outlet has reported that the repercussions of the Strait of Hormuz crisis on the oil-dependent economies of the Persian Gulf states will be long-lasting.
According to the report of Pakistan News Network; following the significant impact Iran’s stance in the Strait of Hormuz has had on the global energy market—and amidst growing international concern regarding the long-term consequences—the Qatari website Al-Araby Al-Jadeed published an article titled “The Persian Gulf’s Energy Lifeline in the Strait of Hormuz Minefield.” The article notes that recent data from global energy markets indicates an unexpected rise in OPEC crude oil production in June, driven by the resumption of oil exports through the Strait of Hormuz following a brief period of de-escalation and a memorandum of understanding between the United States and Iran prior to its collapse.
OPEC oil production levels remain low.
This allowed many oil tankers to resume operations; however, the situation was short-lived. Following a renewed escalation of tensions in the region, shipping through the Strait of Hormuz was disrupted once again—a development that has had a significant impact, particularly on exports from Persian Gulf nations.
A Reuters survey indicated that oil production by the 11-member Organization of the Petroleum Exporting Countries (OPEC) rose by 3.3 million barrels per day in June compared to the previous month; nevertheless, Citibank raised its forecast for the average price of Brent crude oil for the third quarter to $80 per barrel, up from the previous estimate of $75 per barrel.
The reason for this is the persistent delay in resolving the crisis between Iran and the United States. Energy market observers have reported that OPEC’s overall oil production remains significantly below pre-war levels; actual output has dropped by approximately 7.3 million barrels per day, representing a 28 percent decline compared to February.
However, a detailed analysis of production increases among the eleven OPEC member countries subject to quotas reveals that Kuwait has led the recovery, raising output by 870,000 barrels per day to reach 1.36 million barrels per day. This rebound follows a sharp production decline of nearly 80 percent caused by the repercussions of the military conflict in the region.
Saudi Arabia also secured second place by increasing production by 550,000 barrels per day, bringing its average daily output to 7.2 million barrels in June. Iran followed, increasing production by 510,000 barrels per day to reach an average daily output of 2.85 million barrels.
The Oil-Dependent Economies of the Persian Gulf: Trapped in the Quagmire of the Strait of Hormuz
However, the situation regarding energy markets and oil exports from Persian Gulf nations has once again become volatile due to renewed tensions between Iran and the United States; as the conflict intensifies, these developments are imposing a complex economic reality upon the Gulf Cooperation Council (GCC) states.
Global energy markets are currently trading under the combined pressure of recovering supplies, declining demand in China, and robust supply growth from the United States. According to an assessment published on July 16 by Discovery Alert—a platform specializing in economic consulting and commodities market analysis—this situation indicates that as the conflict drags on and hostilities escalate, the region’s economic development plans will face mounting financial pressure rather than benefiting from a swift recovery.
Energy analysts believe that the escalation of tensions significantly heightens security and logistical challenges. While Saudi Arabia’s exports via the massive Ras Tanura terminal have returned to approximately 90 percent of normal levels, the presence of nearly 80 unexploded naval mines along the main shipping lanes of the Strait of Hormuz poses a significant security threat.
According to observers, this drives up marine insurance costs and deters many major shipping companies from the risk of traversing this vital waterway. Furthermore, countries in the region are grappling with a war-damaged infrastructure crisis, as oil refineries and critical ports in Bahrain, Iraq, Kuwait, and Saudi Arabia have sustained damage requiring costly repairs and maintenance that could take several years to complete.
Reports also indicate that the production increase in June was a temporary achievement; even if the war were to end in the future, it would not negate the profound impact of the conflict. Here, the Strait of Hormuz has turned into a veritable trap, strangling the Persian Gulf’s energy artery, as direct security threats have become intertwined with rising maritime insurance costs.
A Bleak Outlook for the Future of Energy in Gulf States
This maritime blockade has isolated the region’s ports, crippled the flexibility of their exports, and imposed severe financial pressures that threaten public budgets and development plans. It also confronts the future of Gulf oil with an unprecedented economic and geopolitical dilemma, even as hopes remain for an agreement regarding the Strait of Hormuz through ongoing negotiations.
Persian Gulf states rely almost entirely on oil revenues to cover their public expenditures. Consequently, countries such as Kuwait, Bahrain, and Qatar face a severe geographical challenge due to the lack of maritime routes alternative to the Strait of Hormuz.
Speaking to Al-Araby Al-Jadeed, oil expert Ahmed Hassan Karam stated that the resumption of production and exports serves as a vital lifeline for restoring revenue flows to Gulf States, meeting public budget obligations, and ensuring the continuity of economic activity.
He added: However, the continuation of military attacks, escalating political tensions, and the closure of the Strait of Hormuz would inevitably lead to supply shortages and a rise in oil prices. This could result in a decline in real revenues due to the inability to export at normal volumes.
The Arab expert emphasized that this situation places Gulf States at risk of paralysis or a complete inability to operate at their previous pace, as they face difficult choices regarding oil prices and production levels during a naval blockade.
In this context, Alan Gelder, Senior Vice President of Refining, Chemicals, and Oil Markets at the international consultancy Wood Mackenzie, stated that—according to an estimate published on July 22 by the American Oil & Gas Reporter, a platform specializing in the oil and gas sector—a prolonged closure of the Strait of Hormuz could push the price of Brent crude above $150 per barrel.
He noted that the entire value chain, including oil facilities and ports in Gulf Cooperation Council (GCC) countries, would require more than a year to fully recover, and that the real challenge lies in the structural impact of the shock on the behavior of major importing nations.
Goldar emphasized that prolonged supply disruptions could drive consumers to adopt supportive policies, prompting them to act more aggressively in reducing their reliance on hydrocarbons and accelerating renewable energy programs.
He explained that long-term forecasts indicate that if importing nations accelerate efforts to reduce oil dependency, oil prices will be structurally weaker than pre-war levels.
The international energy expert noted that Brent crude prices would experience volatility in 2027 due to a mismatch between the pace of strategic reserve replenishment and the recovery of actual demand, ultimately stabilizing at around $78.
He warned that liquefied natural gas (LNG) infrastructure—particularly in Qatar—has sustained extensive damage requiring nearly five years to repair, a timeline that would significantly delay the recovery of the gas sector compared to the oil sector. Under these circumstances, if maritime tensions persist and the Strait of Hormuz remains closed, oil prices would reach the threshold of $200 per barrel by year-end, while diesel and jet fuel contracts would climb to $300 per barrel.