Oil Losses in Iran War Exceed Rp860 Trillion, Everyone Suffers
The economic impact of the Iran war is becoming apparent on an unprecedented scale. In less than two months, global energy supply disruptions have wiped hundreds of millions of barrels of oil from the market and caused losses of tens of billions of dollars.
Analysts and Reuters calculations indicate that the world has lost more than US$50 billion, or nearly Rp860 trillion, in crude oil value that was not produced since the Iran war began almost 50 days ago. The impact is estimated not to stop anytime soon, but rather to be felt for months or even years to come.
Iran’s Foreign Minister, Abbas Araqchi, stated over the weekend that the Strait of Hormuz has been reopened following an agreement on a ceasefire in Lebanon. On the other hand, US President Donald Trump said he is confident that an agreement to end the Iran war will be reached “soon”, though it is unclear when.
Since the crisis began at the end of February, more than 500 million barrels of crude oil and condensate have been lost from the global market, according to Kpler data. This figure is described as the largest energy supply disruption in modern history.
To illustrate the magnitude of this number, the loss of 500 million barrels of oil is equivalent to various extreme scenarios.
Wood Mackenzie’s chief analyst, Iain Mowat, explained that the volume is equivalent to halting all global aviation demand for 10 weeks, or no vehicle travel worldwide for 11 days, or even equivalent to no oil supply to the global economy for five days.
Reuters calculations also show that the figure is nearly equivalent to the US’s oil needs for almost one month, or more than one month’s oil consumption for all of Europe. Indeed, the amount is equivalent to the US military’s fuel consumption for about six years, based on annual usage of around 80 million barrels in fiscal year 2021.
In addition, the lost volume is sufficient to run the entire international shipping industry for about four months.
From a production perspective, Arab Gulf countries lost around 8 million barrels per day in March, a figure almost equivalent to the combined production of the world’s two oil giants, Exxon Mobil and Chevron.
Disruptions are also evident in jet fuel exports. Kpler data shows that jet fuel exports from Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain, and Oman plummeted from around 19.6 million barrels in February to just 4.1 million barrels for the combined March and April so far.
According to Reuters calculations, this decline is equivalent to fuel for about 20,000 round-trip flights between New York’s JFK Airport and London’s Heathrow.
With an average oil price of around US$100 per barrel since the conflict began, the lost volume means about US$50 billion in vanished revenue, according to Kpler senior analyst Johannes Rauball. This value is equivalent to a cut of about 1% of Germany’s annual gross domestic product, or even equivalent to the entire GDP of small countries like Latvia or Estonia.
Although there are signals of reopening the Strait of Hormuz, supply recovery is not expected to be quick. Global onshore crude oil stocks have fallen by around 45 million barrels throughout April, while production disruptions since late March have reached about 12 million barrels per day.
Rauball estimates that heavy oil fields in Kuwait and Iraq could take four to five months to return to normal operating levels. This situation has the potential to extend pressure on stocks through the summer.
Furthermore, damage to refinery capacity and the Ras Laffan liquefied natural gas complex in Qatar indicates that full recovery of the region’s energy infrastructure could take years.