Crisis Alert: Countries Ramp Up Oil Export Restrictions and Cut Production

Jakarta, CNBC Indonesia — Many countries are weighing measures to curb oil and gas exports as tensions in the Middle East show no sign of abating. With the conflict intensifying, global oil prices remain high as market participants grow more concerned about supply disruptions from a region long seen as a cornerstone of world energy production. Disruptions to major shipping lanes, attacks on vessels, and distribution bottlenecks are making the oil market highly sensitive to every new development. According to Refinitiv data, global oil prices remain elevated amid the geopolitically charged escalation in the Middle East. As of 16:49 WIB on Friday 6 March 2026, Brent crude was trading at US$86.60 per barrel, up 1.4%, while West Texas Intermediate (WTI) was at US$83.36 per barrel, up 2.9%. In recent days, prices had climbed sharply. On Thursday 5 March 2026, Brent closed at US$85.41 per barrel and WTI at US$81.01 per barrel, one of the highest levels since mid‑2024. The rise followed energy markets reacting to global supply disruptions triggered by the conflict among the United States, Israel, and Iran. This situation has prompted several countries to take precautionary steps to safeguard their oil and gas stocks. Some have already cut production as exports are disrupted, while others have begun to withhold shipments abroad to ensure domestic needs are met. Iraq Slashes Production Iraq is among the clearest examples of a country taking concrete action. Two Iraqi oil officials said the country has cut oil output by almost 1.5 million barrels per day due to disrupted exports and diminishing storage capacity. The cuts originate from the Rumaila, West Qurna 2, and Maysan fields. In fact, the reduction could widen to more than 3 million barrels per day if tanker ships remain unable to move freely through the Strait of Hormuz and reach loading ports. The Iraqi Ministry of Oil also stated that the production decline is a result of exports being halted following the closure of the Strait of Hormuz. China Begins to Withhold Fuel Exports China has also started to take precautionary steps, though not for crude oil exports. The Chinese government is reported to have asked the country’s largest refineries to halt exports of diesel and petrol. Officials from the National Development and Reform Commission (NDRC) are said to have met with refinery executives and urged a temporary stop to shipments of refined petroleum products to be implemented with immediate effect. Refineries were also asked to stop signing new contracts and to renegotiate the cancellation of shipments previously agreed. However, exemptions are provided for jet fuel and bunker fuel stored in bonded storage, as well as supplies to Hong Kong and Macau. This move reflects Beijing’s effort to prioritise domestic needs amid the deepening Middle East crisis. China has a very large refining sector, but much of its production is used domestically, so it is not a crucial supplier. China ranks third in exports by sea, after South Korea and Singapore. Nevertheless, the restrictions illustrate how regional economies reliant on imports are prioritising domestic needs as the Middle East crisis deepens. Russia’s Talk of Stopping Gas Exports While not officially halted yet, Russia’s government has opened the door to such a possibility. Deputy Prime Minister Alexander Novak said the government will soon hold a meeting to discuss the potential termination of gas exports to Europe. Previously, President Vladimir Putin said Russia could cut current supplies amid energy price spikes driven by the Iran crisis. Although the decision has not been taken, the statements signal that Russia is weighing options to curb energy deliveries to European markets. Novak also noted that Russian gas still accounts for more than 12% of Europe’s supply. Developments from Iraq, China, and Russia reveal one common thread: when the Middle East conflict triggers supply and distribution disruptions, both producing countries and major consumers move to prioritise domestic energy needs. As long as disruptions in major shipping routes remain unresolved and regional tensions stay high, the global energy market could remain under pressure, with oil prices likely to stay volatile and supply shadowed by uncertainty. CNBC Indonesia Research (evw/evw)