The U. S.-Israel conflict with Iran has significantly disrupted oil and natural gas exports from the Middle East, leading to production stoppages in various countries, including Qatar and Iraq. Key disruptions include:
Iraq, the second-largest OPEC producer, has reduced its output by nearly 1.5 million barrels per day, facing potential further cuts up to 3 million bpd if exports do not restart. Nearly 4.1 million bpd was produced in January, which is about 4% of the global supply. Additionally, companies in Iraqi Kurdistan have halted operations for safety reasons, impacting their exports of around 200,000 bpd to Turkey.
QatarEnergy has paused operations at its LNG facilities, which include some of the largest plants in the world and account for about 20% of global LNG. Force majeure was declared on LNG shipments.
Saudi Arabia, the leading oil exporter, suspended operations at its 550,000 bpd Ras Tanura refinery and is rerouting crude shipments due to disruptions. Other countries, including Israel and Kurdistan, have also limited oil and gas production, with additional outages caused by a fire at UAE’s Fujairah port.
Shipping through the Strait of Hormuz is severely impacted, as Iran attacked ships and declared the waterway closed. Major marine insurers have canceled war-risk coverage for vessels in the area. The U. S. has offered naval escort for tankers but skepticism remains among shipowners.
The consumer impact includes reduced refinery operations in China and India’s search for alternative crude sources. Indonesia plans to increase U. S. crude imports to compensate for lost Middle Eastern supplies. Alternative sources from Brazil, West Africa, and the U. S. are being considered, though they are more costly and take longer to arrive.
With information from Reuters
