The largest oil producers in the Middle East Gulf have deepened production cuts and are already lowering output by a combined more than 5 million barrels per day (bpd) as the de facto halt to tanker traffic in the Strait of Hormuz has started to affect upstream production.
The oil market would experience “catastrophic consequences” if the halt to Strait of Hormuz tanker traffic continues, according to Saudi Aramco, the world’s top crude exporter and biggest oil firm.
Asia is struggling to obtain spot LNG cargoes for emergency supply this month as the halt to Qatar’s exports tightened the market and reignited competition with Europe for promptly available supply.
Global oil demand is set to grow by 1.1 million barrels per day (bpd) this year to a new record high, according to the world’s single largest crude exporter, Saudi oil giant Aramco.
Marine fuel supply at the major Middle East bunkering hub of Fujairah has been disrupted after debris from an intercepted drone sparked a fire at an oil storage facility, forcing terminals to halt bunker barge loadings and tightening fuel availability in regional shipping markets.
Global energy leaders are gathering to decide whether to release emergency oil reserves as production and export disruptions tied to the Middle East conflict continue to strain global markets.
Iran has begun laying naval mines in the strategically vital Strait of Hormuz, according to two people familiar with U.S. intelligence reporting, in what analysts warn could extend the effective blockade of the world’s most critical energy chokepoint and deepen disruption to global oil flows.
The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 1.7 million barrels in the week ending March 6, after adding 5.6 million barrels in the week prior. Analysts had expected a build of 1.4 million barrels.
Chevron and Shell are reportedly close to sealing deals for oil production in Venezuela following the United States’ takeover of the country’s energy industry, Reuters wrote, citing unnamed sources. Both companies had already secured preliminary deals with the Venezuelan authorities.
Equinor has made commercial discoveries of oil in the Troll area and gas and condensate in the Sleipner area, the company announced on Monday.