Oil Shortage Scenario Looms Large
The Middle East Oil Crisis Has Already Cost Global Businesses $25 Billion Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
Implausible three months ago, the likelihood of a crude shortage on a global scale is becoming increasingly realistic with each day that the Strait of Hormuz remains almost completely blocked.
Analysts are no longer modeling for a swift end to the war between the United States, Israel, and Iran.
They are now also allowing for an extended period of severe energy flow disruptions—and it is not looking good.
Kplerreportedearlier this month the cumulative loss of oil supply in the Middle East since February 28 had hit 782 million barrels as of May 8 and was on track to expand to 1 billion barrels by the end of the month.
In daily output terms, the picture looks no better.
Saudi Arabia is losing over 3 million barrels daily, Iraq is producing 2.88 million barrels daily less, and Iran is at 1.69 million barrels daily lower output, while Kuwait has suffered a decline of 1.75 million barrels daily.
With so much production offline, the most sensible thing to do is tap reserves.
Estimated at record highs, the world’s oil stocks were cited as a big reason for predictions of a severe glut that could exceed demand by almost4 million barrels daily, according to the International Energy.
Now, the IEA iswarningthat demand for oil will exceed supply this year.
In its latest monthly report, the IEA said it expected global oil supply to fall by some 3.9 million barrels daily over the current year—which is a lot less than what the actual current supply loss is from the Middle East.
The IEA estimates that loss at 10.5 million barrels daily.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | ▲ +0.34% |
| WTI Crude | $96.90/bbl | ▲ +0.21% |
| EN590 Diesel | $846/MT | ▲ +0.18% |
| Jet Fuel A-1 | $1090/MT | ▲ +0.55% |
| Mazut M100 | $450/MT | ▼ -0.15% |
| Bitumen 60/70 | $470/MT | ▲ +0.08% |
| Sulphur Gran 99.5% | $470/MT | ▼ -0.44% |
| Urea 46% Gran | $650/MT | ▲ +1.12% |
| NPK 16-16-16 | $460/MT | ▼ -0.28% |
| Nat Gas TTF | $15.42/MMBtu | ▲ +0.92% |
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