Goldman Sachs: Post-Conflict Oil Flows Through Hormuz May Only Recover to 70% of Pre-War Levels
Taylor Wilson
Goldman Sachs said on June 17 that oil flows through the Strait of Hormuz may recover to only ~70% of pre-war levels, as Gulf producers have shifted en masse to alternative pipelines — a structural demotion of the world's most important oil chokepoint.
Why only 70% recovery?
Pre-war, Hormuz handled roughly 20 million barrels per day of oil and products. Restoring that would require adding about 13 million b/d to current flows.
Visible flows now stand at just ~1.3 million b/d, with another 1.6 million b/d from the Gulf of Oman — possibly linked to "dark transit."
This means → the gap is not a production problem; producers actively rerouted their oil elsewhere.
Where did the oil go?
Saudi Aramco ramped up cross-country pipelines to the Red Sea coast; the UAE activated pipelines to Fujairah — a port outside the Strait.
Iraq rerouted crude to Turkey's Ceyhan port; combined flows via Yanbu, Fujairah, and Ceyhan now total 7.5 million b/d.
In plain terms = the war forced new routes into existence, and now — even with the strait reopened — the oil is not coming back.
Why won't producers go back?
UAE Trade Minister Thani Al Zeyoudi stated: "We are moving toward zero Hormuz dependence — this plan will not stop regardless of whether the strait is open."
The UAE plans to expand Dibba, Fujairah, and Khor Fakkan ports, and build at least one new port on the Gulf of Oman coast.
Kuwait Oil Company CEO Sheikh Nawaf Al-Sabah revealed ongoing talks with Saudi Arabia and the UAE to expand pipeline capacity for Kuwaiti crude.
This reflects a strategic upgrade: wartime emergency routes are becoming permanent infrastructure — Hormuz's chokepoint status is being deliberately diluted.
When will flows recover, and is shipping capacity enough?
Goldman expects Hormuz flow recovery to be largely complete by end of next month; Gulf production could normalize by October.
On shipping: roughly 860 million barrels of empty tanker capacity is deployed within the strait or within five days' sailing distance — capacity itself is not a bottleneck.
But some shipowners remain cautious about transiting. This means → hardware is in place, but psychology is still a drag on actual throughput.
What does this mean for markets?
Goldman's core conclusion: even if Hormuz fully reopens, pre-war 100% flow levels may never return — 70% is the new normal.
The validation point over coming months: whether alternative-route usage stays above the pre-war baseline.
In plain terms = Hormuz has shifted from "the sole chokepoint" to "one route among several" — the geopolitical risk premium baked into oil prices needs recalculating.
Content is for reference only, not financial advice.