Oil market collapses: $50 billion evaporates in US-Iran war!

Within the first 50 days of the war that began in Iran, the amount of oil that could not be supplied to the global oil market and the resulting economic damage have drawn attention. The monetary equivalent of the 500 million barrels of oil missing from the markets has exceeded $50 billion. This amount is equivalent to the total demand of the US for one month and Europe for more than a month.

According to information compiled by DW Türkçe from the data company Kpler, such a supply loss is equivalent to all vehicles not hitting the road for 11 days or the global aviation sector being unable to operate for 10 weeks.

This unprecedented disruption in the crude oil market also represents enough fuel to power the international maritime transport sector for four months. It is also comparable in size to the US military's fuel needs for approximately six years.

With the crisis, Gulf countries have halted almost all production; the amount of oil coming out of the region has fallen to a minimum level. Major oil exporters such as Qatar, Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, and Oman were able to ship a total of 4.1 million barrels of jet fuel last month—a figure well below the 19.6 million barrels reached in February.

Such a disruption means a reduction large enough to cover the fuel needs of 20 thousand flights between New York and London.

LOSSES WILL SHAKE ECONOMIES

The loss in oil is deeply affecting not only producer countries but the global economy as well. The disappearance of $50 billion in revenue is cited as a value close to one percent of Germany's annual national income, or nearly the entire annual economy of countries like Latvia and Estonia.

With the crisis, oil stocks around the world are melting rapidly. In April alone, a decrease of approximately 45 million barrels was recorded in national reserves. Looking from March to today, a total production cut of 12 million barrels has occurred.

Oil market experts emphasize that it will take at least four to five months for the fields in Kuwait and Iraq in particular to fully recover, and that it may take much longer for production to return to normal. Stock depletion is expected to accelerate during the summer months.

REBUILDING ENERGY INFRASTRUCTURE MAY TAKE YEARS

In the midst of the war environment, the announcement made by Iranian Foreign Minister Abbas Araghchi on Friday, following the ceasefire declared in Lebanon, that the Strait of Hormuz had been reopened to transit passage created hope, but this lasted only one day. The Tehran administration announced that it had closed the strait again, claiming that the "US is imposing a naval blockade on the ports."

The damage caused to energy infrastructure in the region, particularly refinery capacity and LNG facilities in Qatar, indicates that full repairs will require a long time. According to analyses, the effects of this shock will be felt in economic indicators for years to come.

News Source: 12punto