The world has lost over $50 billion worth of crude oil that has not been produced since the Iran war began nearly 50 days ago and the aftershock of the crisis will be felt for months and even years to come.
Iranian Foreign Minister Abbas Araqchi said on Friday the Strait of Hormuz was open following a ceasefire accord agreed in Lebanon, while U.S. President Donald Trump said he believed a deal to end the Iran war would come “soon”, though the timing remains unclear.
Since the crisis began at the end of February, more than 500 million barrels of crude and condensate have been knocked out of the global market, according to Kpler data – the largest energy supply disruption in modern history.
Put differently, 500 million barrels of oil lost to the market is equivalent to:
• Curtailing aviation demand globally for 10 weeks; no road travel by any vehicle globally for 11 days; or no oil for the global economy for five days, said Iain Mowat, principal analyst at Wood Mackenzie.
• Nearly a month of oil demand in the United States, or more than a month of oil for all of Europe, according to Reuters estimates.
• Roughly six years of fuel consumption for the U.S. military, based on annual usage of about 80 million barrels from fiscal year 2021.
• Enough fuel to run the world’s international shipping industry for around four months.
Key facts:
• Gulf Arab countries lost about 8 million barrels per day of crude production in March, nearly equivalent to the combined production of Exxon Mobil and Chevron, two of the biggest oil companies in the world.
• Jet fuel exports from Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain and Oman fell from about 19.6 million barrels in February, to just 4.1 million barrels for March and April so far combined, according to Kpler data. The loss in exports would have been enough for around 20,000 round-trip flights between New York’s JFK airport and London Heathrow.
Source: UK.finance