How 50 days of Iran war led to loss of $50 billion worth of oil

The world has lost over $50 billion ‌worth of crude oil that has not been produced since the Iran war began nearly 50 days ago ​and the aftershock of ⁠the crisis will be felt for months and even years to come, according to analysts ‌and Reuters calculations.

Since the crisis began at ‌the end of February, more than 500 million barrels of crude and condensate have been knocked out of the global ⁠market, according to Kpler data – the largest energy supply disruption in modern history.

Put differently, 500 million barrels of oil lost to the market is equivalent to:

• Curtailing aviation demand globally for 10 weeks; no road travel by any vehicle globally for 11 days; or no oil for the global economy for five days, said Iain Mowat, principal analyst at Wood Mackenzie.

* Nearly a month of oil demand in the United States, or more than a month of oil for all ​of Europe, according to Reuters estimates.

* Roughly six years of fuel consumption for the US military, based on ‌annual usage of about 80 million barrels from fiscal year 2021.

Key facts:

• Jet fuel exports from some countries in region fell from about 19.6 million barrels in February, to just 4.1 ​million barrels for ‌March and April so far combined, according to Kpler data. The loss in exports would have been enough for ‌around 20,000 round-trip flights between New York's JFK airport and London Heathrow, according to Reuters estimates.

* With crude prices averaging around $100 a barrel since the conflict began, those missing volumes represent roughly $50 billion in lost revenues, said Johannes Rauball, a senior crude analyst at Kpler. ‌That equates to a ‌1% cut in Germany's annual gross domestic product, or roughly ⁠the entire GDP of smaller countries such as Latvia or Estonia.

FULL RESTORATION COULD TAKE YEARS: Even as ‌Iranian Foreign Minister Araghchi said the Strait of Hormuz was open, recovery of output and flows is expected to be slow.

Global onshore crude inventories have fallen by about 45 million barrels so far in ⁠April, according to Kpler. Since late March, production outages have reached roughly 12 million bpd.

Heavier crude fields could take four to five months to return to normal operating levels, extending stock draws through the summer, Rauball said. Damage to refining capacity and an LNG complex in region means full restoration ⁠of regional energy infrastructure could take years.

Reuters