Kamal Ghorui
The Middle East conflict, now in its sixth week, continues to send shockwaves across the world. From energy supply disruptions to rising fuel prices, several countries are being forced into emergency measures such as work-from-home policies and cost hikes. Meanwhile, the Gulf region is witnessing a split oil reality! While for some producers, soaring crude prices cushion export losses, others are facing sharp drops in revenues.The disruption followed US and Israeli airstrikes on Iran at the end of February, after which Iran effectively shut the Strait, a route for about a fifth of global oil and LNG flows. It later allowed vessels without US or Israeli links to pass, enabling limited transit, though markets continued to face “unprecedented disruption.” International Brent crude rose by 60% in March, a record monthly increase. A Reuters analysis said the surge delivered “financial windfalls to Iran, Oman and Saudi Arabia,” even as crude and condensate exports from most Gulf countries fell sharply. The impact has largely depended on geography, with some countries able to bypass the Strait via pipelines, while others remain heavily reliant on it.
Saudi Arabia
Saudi Arabia’s crude exports dropped to 136 million barrels in March from 181.8 million a year earlier, a 26% year-on-year fall to 4.39 million barrels per day. Despite this, revenues rose to $13.5 billion from $13 billion. Higher prices lifted the value of exports by roughly $558 million compared with a year earlier and boosted royalties and taxes from state oil giant Aramco. The kingdom had increased exports in February to their highest level since April 2023 ahead of potential escalation involving Iran.Additionally, Saudi Arabia has also been able to bypass the Strait through its East-West pipeline linking eastern oilfields to the Red Sea. The pipeline operates at a capacity of 7 million barrels per day, with around 5 million barrels per day available for export. Loadings from Yanbu averaged 4.6 million barrels per day in the week starting March 23, despite attacks targeting the hub.
Iran
Iran’s crude exports remained largely unchanged at 57.4 million barrels compared with 58.5 million a year earlier. However, revenues increased to $5.7 billion from $4.2 billion.According to Reuters, Iran’s revenues rose by 37%. Iran also eased transit restrictions, allowing vessels without US or Israeli links to pass through the Strait, enabling some tanker movement despite the broader shutdown.
Oman
Oman exported 29.1 million barrels in March, down from 32 million a year earlier. Even so, revenues rose to $2.9 billion from $2.3 billion, marking a rise of 26%, according to Reuters.
United Arab Emirates
The UAE’s exports fell to 66 million barrels from 94.5 million a year earlier, while revenues edged down to $6.6 billion from $6.8 billion. Export values declined by more than $174 million year-on-year in March. The country has been partly shielded by the Habshan-Fujairah pipeline, which bypasses the Strait and carries between 1.5 and 1.8 million barrels per day. However, Fujairah has come under a series of attacks that led to loading halts, limiting the extent of this buffer.
Kuwait
Kuwait’s exports dropped sharply to 8.7 million barrels from 45.5 million a year earlier. Revenues fell to $0.9 billion from $3.3 billion. The analysis noted that Kuwait’s revenues “plunged by about three-quarters year-on-year,” reflecting its reliance on the Strait and lack of alternative export routes.
Qatar
Qatar exported 5.6 million barrels in March, down from 23.8 million a year earlier. Revenues declined to $0.6 billion from $1.7 billion, marking a year-on-year drop of $1.2 billion.
Iraq
Iraq saw a grim picture, recording one of the sharpest declines in exports, falling to 17.4 million barrels from 101.7 million a year earlier. Revenues plunged to $1.7 billion from $7.3 billion. The agency’s analysis noted that Iraq has suffered the biggest fall with revenue tumbling 76%. The International Energy Agency described the situation as the world’s biggest energy supply shock yet, citing more than 12 million barrels per day of regional shut-ins and damage to about 40 energy facilities. Meanwhile, US President Donald Trump has threatened to rain “hell” on Tehran unless a deal is reached to reopen the Strait, but Iran has indicated it will not do so as part of a temporary ceasefire. The development comes as the Middle East war has crossed the one-month mark, with no end in sight.
