Kathmandu. The U.S.-Israel war on Iran is not limited to military confrontation. This has a direct impact on the global economy. More than $50 billion worth of crude oil has been lost from the global market in about 50 days.
Analysts say about 500 million barrels of crude oil and condensate have not reached the market since the conflict began in late February. Simply put, this is considered to be the greatest energy supply shortage in modern times.
The disappearance of 500 million barrels of oil from the market could have a significant impact. This oil is enough to fuel all types of vehicles worldwide for about 10 weeks of global air travel or about 11 days. Even if the world’s oil supply suddenly stops, this amount will be enough for only 5 days.
That’s equivalent to about a month’s worth of oil in the United States. It can last the whole of Europe for more than a month. For military purposes, the U.S. military can sustain itself with this oil for about 6 years. Moreover, this fuel is enough to power the global international shipping industry for about 4 months.
Deep impact on Gulf oil production
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The Gulf countries have been the most affected by this war. Gulf oil production fell by about 80 barrels per day in March. The decline is so severe that it is estimated to be equivalent to the combined output of the world’s two largest oil companies, ExxonMobil and Chevron.
The aviation sector was also clearly affected. Jet fuel exports from Saudi Arabia, Qatar, the UAE, Kuwait, Bahrain and Oman fell from about 19.6 million barrels in February to 4.1 million barrels in March and April alone. The decline is so severe that it could have prevented nearly 20,000 flights from New York to London.
$50 billion in crude oil supply disruption{
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Oil prices have also exceeded $100 a barrel during this period. But it’s still fluctuating. As a result, the total value of unsupplied supplies is estimated at $50 billion. This deficit is equivalent to about 1 percent of Germany’s annual GDP and the entire economy of a small country like Latvia or Estonia.
On the ground, the picture is still not entirely clear. Global stockpiles have already fallen by about 45 million barrels in April and daily output has been affected by about 12 million barrels since March.
According to a Reuters report, experts believe it could take 4-5 months for the heavy oil fields of Kuwait and Iraq to return to normal. Damage to the processing and gas infrastructure could take years to repair.
This war will not only be a temporary loss, but it will have an impact. From oil prices to transportation, aviation and daily wages, prices are expected to rise. This is a big blow to the world. That can’t be reversed anytime soon. –Agency
