The moment of truth is approaching for Middle Eastern countries that shut off their oil wells during the war. The Strait of Hormuz has reopened, and these countries are about to turn those valves back on and find out what they’ve got. It could be a gusher, or if President Donald Trump’s predictions were accurate, a series of underground explosions could cause the oil wells to deliver a trickle.
Challenges of Restarting Production
Restarting production at the end of the war isn’t like flipping a switch. The problem just works in reverse. Production will need to be restarted – slowly, over several weeks – to ensure crude reservoirs don’t collapse, requiring re-drilling and substantial repairs. Producers will have to balance underground pressure as they inject water and gas into wells to extract the oil.
When oil wells are shut in, the pressure underground can become imbalanced, deforming the underlying structure. Those changes can damage reservoirs, which can create similar problems for nearby wells, too. Water can seep in, reducing the well’s potential output. Extended downtime can also damage equipment. Pumps and lift systems can easily become corroded. Sand and debris can settle in. Concrete casing and tubing – used to seal and extract oil – can lose integrity, causing leaks and potential hazardous gas releases.
A couple months ago, Trump wouldn’t stop talking about the possibility of explosions. But the way Trump described it isn’t moored in reality. Serious damage – let alone an explosion – almost certainly didn’t happen during the course of the war, oil industry analysts agree.
Industry Experience
The oil industry, even in a country as economically battered as Iran, handled the problem just fine then. It is well equipped to handle it again this time around. Wells have been shut in for extended periods before, including in Iran. During the early days of the pandemic, when basically no one was traveling anywhere, the world ran out of room to store fuel that no one wanted, and oil was literally selling for negative dollars. Producers around the globe shut in their wells without any significant or lasting damage.
Some Middle Eastern suppliers have also temporarily shut in their wells when OPEC production caps kicked in. The oil industry is well equipped to handle the challenges of restarting production. Don’t expect an explosive end to this particular story.
Original reporting: KRDO (Colorado Springs metro) — read the source article.
