US-Israeli War on Iran Causes Major Oil, Gas Disruptions
The U.S. and Israel war against?Iran disrupted oil exports to the Middle East, forcing production stops from Qatar to Iraq.
Here are the major energy disruptions that have occurred so far.
Iraq's OPEC's second largest producer, Iraq, slashes production: Iraq?has reduced almost 1.5 million barrels a day?due...to storage limitations and the lack.of an export route. Officials told. The country could be forced to close 3 million barrels per day within days if the exports don't resume. According to a survey conducted in January, the total Iraqi production accounted for 4.1 million barrels per day, or 4% of global output.
As a precaution, several companies in Iraqi Kurdistan have also halted production at their fields. In February, the region exported 200,000 barrels per day via pipeline to Turkey.
QatarEnergy LNG has been halted. Qatar has ceased operations at its LNG plants on Monday, affecting one of the largest LNG sources in the world and a source which supplies around 20% of global LNG. QatarEnergy suspended some downstream output on Tuesday. On March 4, it declared force majeure for LNG shipments.
Saudi disruptions. Saudi Arabia has suspended production at its 550,000 barrels per day Ras 'Tanura refinery. It also began rerouting crude loads from eastern ports towards Yanbu, on the Red Sea. Saudi Defence Ministry said that the refinery was struck again on March 4 but did not sustain any damage.
Israel and Iraq's Kurdistan Region also cut back on their oil and gas production.
A fire was also caused by debris in the UAE's Fujairah Port, which is a major global hub for oil storage and bunkering.
SHIPPING Strait of Hormuz - Traffic through the Strait has been largely closed after Iran attacked five ships. Only a small number of tankers are allowed to transit, cutting off an important artery that accounts for around 20% of global LNG and oil supply.
Iran declares Strait closed. A senior Iranian Revolutionary Guards officer said on March 2, that the Strait of Hormuz is closed, and warned that Iran will fire on any ships attempting to pass.
Major marine insurers cancel war risk coverage for vessels operating within Iranian, Gulf and adjacent waters.
US offers 'assurances': Trump stated that the U.S. Navy would be able to escort oil tankers through Gulf Strait, and instructed the U.S. International Development Finance Corporation (IDFC) to provide financial guarantees and political-risk insurance for Gulf?shipping. However, shipowners and analysts are skeptical this will suffice.
Impact on consumers: China reduces refinery runs. Chinese?refiners have shut down crude units, or are accelerating planned maintenance because of disrupted crude flow.
India looks for alternatives: India is searching for alternative sources of crude oil, LPG, and LNG in order to "prepare" itself if the crisis lasts longer than 10-15 days, according to a government official.
Indonesia shifts its sourcing: Indonesia intends to increase U.S. crude oil imports in order to offset the reduced Middle East supply.
Alternative supplies are available: Cargoes can be shipped from Brazil, West Africa, and the U.S. but it takes over a whole month to get them to Asia, and they are more expensive due to soaring freight costs, traders reported. (Reporting and editing by Alex Lawler in London, Matthew Lewis and Gareth Jones.
(source: Reuters)
