This Arab Country Suffers the Biggest Losses Due to Iran War, Losing Rp 17 Trillion Per Day

The economic impact of the ongoing conflict in the Gulf region has recorded a significant escalation, with daily losses exceeding US$2 billion or approximately Rp 33.94 trillion (US$1 = Rp 16,970). This geopolitical tension has resulted in the effective closure of the Strait of Hormuz, a crucial maritime route that massively disrupts the smooth flow of global energy. The closure of this route delivers a heavy blow to the stability of both regional and international economies. The Gulf region, which historically produces around 30 million barrels per day (bpd), accounts for about one-third of the world’s total oil supply. Meanwhile, according to data from the International Energy Agency (IEA), the Strait of Hormuz handles around 20% of global oil trade and facilitates a quarter of all seaborne energy shipments. The hindrance to this access has caused extreme contraction in export volumes from major producers such as Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman, Bahrain, and Iraq. Oil exports from the Gulf region have dropped by nearly 60%. Shipment volumes have fallen sharply from 25.1 million bpd to just 9.7 million bpd since the start of the conflict. The reduction in global crude oil supply, amounting to around 15 million bpd, is classified by experts as one of the largest supply shocks in modern history. The financial impact of this operational disruption is substantial. Over the past two weeks, producer countries in the Gulf region are estimated to have lost potential oil revenue of up to US$25 billion. It should be noted that this figure is solely from crude oil sales and does not include additional losses from liquefied natural gas (LNG) and petrochemical products, whose distribution has also halted. Widespread concerns over the halt in crude oil and petroleum product flows through the Strait of Hormuz have driven global oil prices to surge beyond US$100 per barrel in a very short time. In response to this crisis, IEA member countries have agreed on an emergency measure by releasing 400 million barrels from their strategic reserves. The primary goal of this emergency reserve release is to stabilise the global energy market and ensure supply availability in the short term. Nevertheless, energy market analysts assess that this intervention will only mitigate market volatility temporarily and lacks the fundamental strength to significantly lower oil prices if the main distribution route remains closed. TESPAM President Oguzhan Akyener explains that the accumulated daily losses for Gulf countries are estimated at US$2.3 billion. Saudi Arabia leads the list with the largest burden of losses, approaching US$1 billion per day, or Rp 16.97 trillion. This condition places immense pressure on the kingdom’s economy, given that oil revenues contribute around 60% to the country’s total income. Elsewhere, the United Arab Emirates is estimated to bear losses of around US$350 million daily. Qatar, which relies on gas exports, faces potential revenue losses of about US$300 million as LNG ship shipments slow significantly. Kuwait also suffers losses of around US$200 million per day, while Bahrain bears a daily burden of about US$40 million. Oman is also recording crucial declines due to its high dependence on oil and gas commodities. Iraq is one of the countries most severely affected proportionally. Iraq’s national oil production has plummeted from 4.2 million bpd to just 1.2 million bpd. More than 90% of Iraq’s energy exports heavily depend on smooth logistics through the Strait of Hormuz, so this disruption triggers losses of around US$300 million daily for the country. To date, the Strait of Hormuz remains a strategic bottleneck with few adequate alternative options to connect the Persian Gulf to global consumers. Some producer countries are beginning to maximise alternative routes to mitigate economic losses, particularly through land pipeline networks. Saudi Arabia is currently operating at full capacity its East-West crude oil pipeline, which has a maximum capacity of about 5 million bpd. Meanwhile, the United Arab Emirates relies on the Abu Dhabi crude oil pipeline network that ends in Fujairah. Although these mitigation efforts continue, analysts warn that the capacity of these alternative pipeline routes is still too small to offset the scale of the supply disruption occurring. As long as the constraints in the Strait of Hormuz are not resolved, high volatility in the global energy market is projected to persist.