world
Iran War Disrupts Gulf Energy Supplies and Accelerates Regional Economic Shifts
The ongoing U.S.-Israeli war against Iran has caused major disruptions to global oil and LNG supplies through the Strait of Hormuz. Gulf states are adapting by diversifying their economies and energy roles. This conflict highlights evolving partnerships in the global energy sector.
Apr 22, 3:27 AM·3m read1 source
FO
realclearmarkets.comAudio version
Tap play to generate a narrated version.
Developing·Limited corroboration so far. This page will refresh as more sources emerge.
The U.S.-Israeli war against Iran has led to significant disruptions in global oil and liquefied natural gas supplies. Before the conflict, about 20 percent of the world's oil supply and 20 percent of liquefied natural gas exports passed through the Strait of Hormuz.
Over the past month, traffic through the strait has dropped to an average of five percent of normal flows, according to a report in Foreign Affairs. Saudi Arabia and the United Arab Emirates have attempted to reroute crude oil shipments via alternative pipelines, but these routes cannot fully compensate for the lost volume and remain vulnerable.
An Iranian attack on March 18 damaged Ras Laffan, Qatar's main LNG export facility, which could reduce its capacity for years. The CEO of Kuwait Petroleum has pointed out that the disruptions create a domino effect: even if a cease-fire were accomplished tomorrow, reinstating insurance for tankers at acceptable rates could take months.
Crude oil needs to be released from storage to allow pumps to restart before jet fuel and diesel refineries can begin operating again and jump-start the production of key petrochemicals.
The disruptions create a chain reaction, requiring the release of stored crude oil to restart pumps, refineries, and petrochemical production. Historical examples include the Houthi attacks on Red Sea shipping in late 2023, where transit remains 60 percent below pre-2023 levels despite a cease-fire.
It took TotalEnergies four years to restart construction on its Mozambique LNG project after a major jihadist assault near the site in 2021. The war is prompting Gulf states to accelerate economic diversification and expand their roles in global energy supply chains.
