Iran war erases US$50bn in global oil revenues in the first 50 days
Despite signs of a ceasefire, analysts say missing crude volumes, falling inventories and damage to regional energy facilities will slow a full recovery.
- The conflict has resulted in a loss of over $50 billion in global oil revenues within its first 50 days, caused by the removal of more than 500 million barrels of crude from the market.
- This supply loss is considered the largest energy supply disruption in modern history, equivalent to the entire global economy going without oil for five days.
- The impact includes a drop of about 8 million barrels per day in crude production from Gulf Arab countries in March and a sharp decline in regional jet fuel exports.
- Recovery of production and infrastructure is expected to be slow, with full restoration potentially taking months or even years.
More than 500 million barrels of crude and condensate have been removed from the global market since the Iran war began at the end of February, making it the largest energy supply disruption in modern history, according to Kpler.
With crude averaging about US$100 a barrel during the conflict, analysts and Reuters calculations show the missing output is worth more than US$50 billion, and the damage is likely to be felt for months and even years.
On Friday, Iranian Foreign Minister Abbas Araqchi said the Strait of Hormuz was open after a ceasefire accord reached in Lebanon, while US President Donald Trump said he believed a deal to end the Iran war would come “soon”, though the timing remained unclear.
The scale of the supply loss is immense.
Iain Mowat, principal analyst at Wood Mackenzie, said 500 million barrels taken out of the market was equivalent to 10 weeks of global aviation demand, 11 days without road travel by any vehicle worldwide, or five days without oil for the entire global economy.
Reuters estimates also showed it was equal to nearly a month of US oil demand, more than a month of Europe’s oil demand, roughly six years of US military fuel consumption based on annual usage of about 80 million barrels in fiscal year 2021, and enough fuel to keep the world’s international shipping industry running for around four months.
In March alone, Gulf Arab countries lost about 8 million barrels a day of crude production, almost matching the combined output of Exxon Mobil and Chevron, two of the world’s biggest oil companies.
Kpler data also showed jet fuel exports from Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain and Oman dropping sharply from about 19.6 million barrels in February to just 4.1 million barrels for March and April combined so far.
Reuters estimates said that the missing export volume would have been enough for around 20,000 return flights between New York’s JFK airport and London Heathrow.
Johannes Rauball, senior crude analyst at Kpler, said the missing volumes represented roughly US$50 billion in lost revenue.
He said that was equivalent to a 1% cut in Germany’s annual gross domestic product, or roughly the size of the entire GDP of smaller countries such as Latvia or Estonia.
Despite Araqchi’s remarks on Hormuz, recovery in output and flows is expected to be slow.
Kpler said global onshore crude inventories had already fallen by about 45 million barrels so far in April, while production outages since late March had reached roughly 12 million barrels per day.
Rauball said heavier crude fields in Kuwait and Iraq could take four to five months to return to normal operating levels, extending stock draws through the summer.
He added that damage to refining capacity and Qatar’s Ras Laffan LNG complex meant full restoration of the region’s energy infrastructure could take years.
