The U.S.-Israeli war on Iran and Tehran’s attacks on Gulf neighbors have disrupted oil and natural gas exports from the Middle East and forced production stoppages.
The war has halted shipments via the world’s most important oil artery, the Strait of Hormuz, which handles 20% of global oil and LNG supply.
Saudi oil giant Aramco 2222.SE, the world’s top oil exporter, warned on Tuesday of “catastrophic consequences” for the global oil market if the Strait does not open.
Here are key energy disruptions so far:
Production shutdowns
- Saudi Arabia has cut oil production only marginally to about 9.8 million barrels per day (bpd) from its OPEC quota of 10.1 million bpd, Energy Aspects estimates. In February, it produced about 10.9 million bpd to boost exports in preparation for possible supply disruptions. Last week, it suspended output at its 550,000-bpd Ras Tanura refinery and began rerouting crude loadings from eastern ports to Yanbu on the Red Sea. The refinery was struck again on March 4.
- UAE refinery shut: Abu Dhabi state oil giant ADNOC has shut the 922,000-bpd Ruwais refinery after a drone strike caused a fire, a source with knowledge of the situation said on Tuesday. A fire also broke out at the UAE’s Fujairah port, a key global oil storage and bunkering hub.
- Kuwait force majeure: Kuwait Petroleum Corporation began cutting oil output and declared force majeure on March 7.
- Iraq: Oil production from Iraq’s main southern oilfields has fallen by 70% to just 1.3 million bpd from 4.3 million, sources said on March 8.
- On top of that, in Iraqi Kurdistan several companies have stopped output. The region exported 200,000 bpd by pipeline to Turkey in February.
- QatarEnergy LNG halted: Qatar stopped operations at its LNG facilities on March 2, affecting some of the world’s largest plants and a source that supplies about 20% of global LNG. QatarEnergy also suspended parts of downstream output a day later. It declared force majeure on LNG shipments on March 4.
- Bahrain: Bapco Energies on Monday declared force majeure on its group operations following an attack on its 380,000 bpd Sitra refinery, which mainly buys Saudi crude.
- In Iran, Israeli strikes have hit multiple fuel depots and Kharg Island, Iran’s main oil export outlet, although the extent of damage was not clear.
- Consultants IIR said Middle East refiners have slashed 1.9 million bpd of crude refining capacity as a direct result of the war.
Shipping
- Strait of Hormuz: Shipping along the narrow strait has all but halted since the start of the war. Iran declared the Strait closed on March 2 and warned it would fire on any ship attempting to pass.
- Some 13 ships came under attack in the region, including three on March 11, according to the United Kingdom Maritime Trade Operations, and only a few tankers managed to sail through the Strait.
- U.S. offers assurances: President Donald Trump has said repeatedly the U.S. Navy could escort tankers through the Strait, but the Navy has refused such requests from the industry so far, citing a risk of attacks that is too high, according to sources familiar with the matter.
- War risk insurance cancelled: Major marine insurers are cancelling war-risk coverage for vessels operating in Iranian, Gulf and adjacent waters.
Trump directed the U.S. International Development Finance Corporation to provide political‑risk insurance and financial guarantees for Gulf shipping, though shipowners and analysts doubt this will be enough.
Impact on consumers
- Numerous Asian refineries and petrochemical companies have cut runs or declared force majeure as the war disrupts supplies of feedstocks including naphtha, used for steam crackers.
- South Korea will cap domestic fuel prices to contain price spikes and discourage panic buying.
- Vietnam plans to remove import tariffs on fuels until the end of April to ensure sufficient supply.
Bangladesh will close universities from Monday and bring forward Eid al-Fitr holidays to conserve electricity.
—Reporting by Ahmad Ghaddar in London and Nerijus Adomaitis in Oslo; additional reporting by Stephanie Kelly; Editing by Matthew Lewis, Gareth Jones, Helen Popper and Susan Fenton