- Global oil supply has been cut by up to 11 million bpd due to the Middle East war, with disruptions likely to persist as ceasefire prospects fade.
- Even in a best-case scenario, restoring production will take months, with full normalization potentially delayed until late 2026.
- Ongoing chokepoint disruptions and LNG outages—especially in Qatar—are tightening energy markets further, pushing prices higher and forcing some countries back to coal.
Global oil production has been slashed by as much as 11 million barrels daily amid the Middle East war. With the latest attempt at ending the hostilities failing, chances are the supply disruption will last a while, and then it would take months to restore production to its full size, even in the best-case scenario.
“Even if there is a durable ceasefire tomorrow and the strait reopens, markets will not return to normal for at least six months,” Rystad Energy’s head of geopolitical analysis told the Financial Times earlier this month. The publication noted that a tenth of global oil production has been shut in, along with some 2.4 million barrels daily in refining capacity. “And in some cases it could take significantly longer,” Rystad’s Jorge Leon also said.
Right now, this best-case scenario with a durable ceasefire is off the table, with the U.S. president threatening to add its own blockade to tanker traffic obstacles in the Persian Gulf. Reuters reported earlier in the day that tankers were already steering clear of the chokepoint, suggesting that instead of an improvement, the situation is worsening, with all the implications for oil markets that are to be expected, such as higher prices, which are already a fact, with Brent crude at over $102 earlier in the day and West Texas Intermediate at over $104 per barrel.
Global oil production has been slashed by as much as 11 million barrels daily amid the Middle East war. With the latest attempt at ending the hostilities failing, chances are the supply disruption will last a while, and then it would take months to restore production to its full size, even in the best-case scenario.
“Even if there is a durable ceasefire tomorrow and the strait reopens, markets will not return to normal for at least six months,” Rystad Energy’s head of geopolitical analysis told the Financial Times earlier this month. The publication noted that a tenth of global oil production has been shut in, along with some 2.4 million barrels daily in refining capacity. “And in some cases it could take significantly longer,” Rystad’s Jorge Leon also said.
Right now, this best-case scenario with a durable ceasefire is off the table, with the U.S. president threatening to add its own blockade to tanker traffic obstacles in the Persian Gulf. Reuters reported earlier in the day that tankers were already steering clear of the chokepoint, suggesting that instead of an improvement, the situation is worsening, with all the implications for oil markets that are to be expected, such as higher prices, which are already a fact, with Brent crude at over $102 earlier in the day and West Texas Intermediate at over $104 per barrel.
Of course, the situation is even more dire in natural gas, as Qatar’s production capacity, which represents 77 million tons annually, remains offline as it undergoes repairs after Iranian strikes. The amount of 77 million tons annually would be impossible to replace over the near term, which is why some big LNG importers are switching to coal, notably in Asia, even in Japan.
According to Wood Mac, as cited by the Financial Times, actual lost production from Qatar stands at 12.8 million tons annually. However, even undamaged trains have been suspended because of the effective blockade of the Strait of Hormuz. Resumption of production at the undamaged trains of Ras Lanuf would take months, the consultancy said.
Based on the predictions and assumptions of analysts, it appears that the global supply disruption in oil and gas as a result of the Middle Eastern war could last until the end of this year—and that is the best-case scenario.
