- Nearly 50 days into the Iran war, $50 billion of crude oil was never produced
- Over 500 million barrels of crude and condensate are missing from the market
- Supply recovery is slow; full regional energy restoration may take years
Nearly 50 days into the Iran war, the global energy market has lost more than $50 billion worth of crude oil that was never produced, with analysts warning that the impact could last for months, if not years.
Since the conflict began in late February, more than 500 million barrels of crude and condensate have been knocked out of the market, according to Kpler data, making it the biggest energy supply disruption in modern history.
Iranian Foreign Minister Abbas Araqchi said on Friday that the Strait of Hormuz remained open following a ceasefire agreement in Lebanon, while Donald Trump said he expected a deal to end the Iran war “soon”, although no timeline has been confirmed.
Also Read:
The missing 500 million barrels are equivalent to nearly a month of oil demand in the United States, more than a month of demand across Europe, around six years of fuel use by the U.S. military, and enough fuel to power global shipping for four months.
“It is equivalent to curtailing global aviation demand for 10 weeks, no road travel globally for 11 days, or no oil for the global economy for five days,” said Iain Mowat.
Reuters reported that Gulf Arab producers lost around 8 million barrels per day of crude production in March, roughly matching the combined output of Exxon Mobil and Chevron.
Jet fuel exports from Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain and Oman collapsed from 19.6 million barrels in February to just 4.1 million barrels across March and the first half of April.
Also Read: '
According to Reuters calculations, the lost jet fuel volumes would have been enough to operate around 20,000 round-trip flights between New York's JFK Airport and London Heathrow.
“With crude prices averaging around $100 a barrel since the conflict began, those missing volumes represent roughly $50 billion in lost revenues,” said Johannes Rauball.
Despite signs of easing tensions, analysts expect the recovery in supply to remain slow. Global onshore crude inventories have already fallen by around 45 million barrels in April, while production outages have averaged roughly 12 million barrels per day since late March.
Rauball said heavier crude fields in Kuwait and Iraq could take four to five months to return to normal output. Meanwhile, damage to refineries and to Qatar's Ras Laffan LNG complex could mean full restoration of regional energy infrastructure takes years.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.