According to analysts and Reuters calculations, in the nearly 50 days since the Iran war broke out, more than $50 billion worth of crude oil has failed to be produced globally, and the repercussions of this crisis will continue to manifest in the coming months and even years.
According to Kpler data, since the crisis erupted at the end of February, more than 500 million barrels of crude oil and condensate have disappeared from the global market— the largest energy supply disruption in modern history.
According to Reuters estimates, this is equivalent to nearly one month of US oil demand, or more than one month of oil consumption for all of Europe.
Based on the US military's annual consumption of approximately 80 million barrels in fiscal year 2021, this would be enough to supply the US military for roughly six years.
This fuel would be sufficient to sustain the global international shipping industry for approximately four months.
Key facts:
Gulf Arab states lost approximately 8 million barrels per day of crude oil production in March, nearly equivalent to the combined production of the world's two largest oil companies — ExxonMobil (XOM.N) and Chevron (CVX.N).
According to Kpler data, jet fuel exports from Saudi Arabia, Qatar, the UAE, Kuwait, Bahrain, and Oman fell from approximately 19.6 million barrels in February to just 4.1 million barrels combined in March and April to date. According to Reuters estimates, the lost exports would be enough to support approximately 20,000 round-trip flights from New York's JFK Airport to London's Heathrow Airport.
Johannes Rauball, senior crude oil analyst at Kpler, said that since the conflict broke out, crude oil prices have averaged around $100 per barrel, and the missing production represents approximately $50 billion in lost revenue. This is equivalent to 1% of Germany's annual gross domestic product, or roughly the entire GDP of relatively small countries such as Latvia or Estonia.
Even if the Strait of Hormuz can be reopened, the recovery of production and shipping is expected to be very slow.
According to Kpler data, global onshore crude oil inventory has declined by approximately 45 million barrels so far in April. Since late March, the scale of production shutdowns has reached approximately 12 million barrels per day.
Rauball said that heavy oil fields in Kuwait and Iraq may take four to five months to return to normal production levels, which will lead to continued inventory drawdowns throughout the summer.
Damage to refining capacity and Qatar's Ras Laffan liquefied natural gas complex means that a full recovery of regional energy infrastructure could take years.
