Iran War causes major disruptions in oil and gas

U.S. and Israeli war against Iran, and Tehran's attacks upon Gulf neighbours has caused oil and gas?exports to be disrupted and production stopped.

Sources say that Saudi Aramco, the world's largest oil producer, cut its output Monday. The Strait of Hormuz is the most important oil artery in the world, and it handles 20% of the global oil supply.

Here are?the?main energy disruptions to date:

Production Shutdowns

Two sources reported on Monday that Aramco had begun reducing production at two of its fields. Saudi Arabia is the top oil exporter in the world. In February, it produced roughly 10.3 million barrels of crude oil per day.

Saudi Arabia halted production at its 550,000 bpd Ras Tanura Refinery last week and started rerouting crude loads from eastern ports to Yanbu, on the Red Sea. On March 4, the refinery was again struck.

Kuwait declared force majeure and began reducing oil production on March 7th.

Abu Dhabi National Oil Company's (ADNOC), the oil company of the United Arab Emirates, "actively manages" offshore output levels. This was announced on March 7th. Fujairah, the UAE's port and a major hub for oil storage and bunkering in the world, also caught fire.

Sources reported on March 8 that the oil?production in Iraq's main southern oilfields had fallen 70%, to just 1.3 millions barrels a day. It was previously 4.3 million.

In addition, several companies in Iraqi Kurdistan have stopped production. In February, the region exported 200,000 barrels per day (bpd) via pipeline to Turkey.

QatarEnergy halted LNG operations: Qatar ceased LNG operations on March 2. This affected some of the largest LNG plants in the world and a source which supplies around 20% of global LNG. QatarEnergy suspended some downstream production a day after. On March 4, it declared force majeure for LNG shipments.

Bahrain: Bapco Energies declared Monday force majeure for its group's operations after an attack on the Sitra refinery that buys mainly Saudi crude and produces 380,000 barrels of oil per day.

Israel has also reduced some of its oil production.

Israeli airstrikes in Iran have targeted multiple fuel depots as well as Kharg Island, Iran’s main oil export?outlet. However, the extent of damage is not yet known.

Shipping

Strait of Hormuz - Traffic through the Strait has been largely shut for a tenth day. Ten ships were attacked and only a few tankers made it through the Strait.

Iran declared the Strait closed March 2, and warned that Iran will fire on any ship trying to pass.

- Major marine insurers cancel war-risk insurance for vessels operating within Iranian, Gulf or adjacent waters.

U.S. provides assurances: Donald Trump stated that the U.S. Navy would be able to escort oil tankers through the Strait. He also directed the U.S. International Development Finance Corporation (IDFC) to provide financial and political guarantees for Gulf shipping. However, shipowners and analysts are skeptical.

Impact on Consumers

As the war disrupts feedstocks, including naphtha (used in steam crackers), many Asian refineries have reduced production or declared force majeure.

South Korea will cap domestic fuel prices in order to curb price spikes and deter panic buying.

Vietnam intends to eliminate import tariffs for fuels by the end of April in order to ensure a sufficient supply.

Bangladesh will close public and private schools on Monday, and move the Eid al-Fitr holiday forward to save electricity.

(source: Reuters)