The Middle East escalation has cut off a number of American allies from the vital Strait of Hormuz
Oil producers in the Gulf region have lost an estimated $15.1 billion in energy revenues since the launch of the US-Israeli strikes on Iran, the Financial Times reported on Friday, citing estimates by analytics firm Kpler.
The US and Israel conducted coordinated strikes on the Islamic Republic in late February, triggering Iranian retaliatory attacks across the region. The escalating crisis effectively shut down the Strait of Hormuz – a critical route that handles roughly one-fifth of the world’s daily oil and gas supply – as Tehran barred ships from non-friendly nations, sending global crude prices soaring nearly 50% to $120 per barrel.
The Strait of Hormuz is estimated to carry around $1.2 billion worth of crude oil, refined products, and liquefied natural gas (LNG) daily, based on average prices and volumes recorded last year. According to Florian Gruenberger of Kpler, as cited by the FT, current flows through the waterway are “negligible” compared with prewar levels.
Among the halted shipments, crude oil reportedly represents the largest share, accounting for 71% of the total value. At least $10.7 billion worth of crude, refined oil products, and LNG cargoes remain stranded inside the maritime route, according to Kpler.
Read more US eases Russian oil sanctionsSaudi Arabia, the world’s second biggest oil producer, has reportedly been hardest hit, missing out on $4.5 billion in energy revenues since the start of the conflict, while Iraq, which relies on oil production for 90% of government revenues, is said to be among the most exposed. Other major producers in the region, including the UAE, Kuwait, and Bahrain, have also faced significant losses.
Gulf oil producers, including Saudi Arabia, Iraq, the UAE, Kuwait, and Bahrain, have deferred $13.3 billion in sales and tax revenue due to disruptions in oil shipments, according to UK-based consultancy Wood Mackenzie, as cited by the FT.
On Friday, US President Donald Trump told Fox News that American forces would escort vessels through the Strait of Hormuz if necessary. Last week, Trump urged tanker crews sailing through the vital waterway to “show some guts.”
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