Global economy loses $50 billion amid Iran conflict, analysts say

The global economy has lost more than $50 billion due to disruptions in oil production linked to the conflict in the Middle East involving Iran, according to analysts from Wood Mackenzie and Kpler, as reported by Reuters.

The losses are attributed to a shortfall of more than 500 million barrels of crude oil and condensate removed from the market since the start of the war in the region, marking what analysts describe as one of the largest energy supply disruptions in modern history.

Iain Mowat, chief analyst at Wood Mackenzie, said the missing volumes are equivalent to 10 weeks of global air travel demand, a global ban on all transportation for 11 days, or the world going without oil for five days. Reuters estimates the disruption is close to one month of US oil consumption or more than a month of Europe’s total consumption, and enough to supply the global shipping industry for about four months.

In March, Persian Gulf countries reportedly lost around 8 million barrels of oil per day in output, nearly matching the combined production of Exxon Mobil and Chevron, the world’s two largest oil companies.

Data from Kpler shows that aviation fuel exports from Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Bahrain, and Oman dropped sharply from 19.6 million barrels in February to 4.1 million barrels in March and April.

Johannes Rauball, senior oil analyst at Kpler, said that with oil prices averaging around $100 per barrel since the start of the conflict, the missing volumes correspond to a 1% reduction in Germany’s annual GDP or roughly the economic output of small countries such as Latvia or Estonia.

By Jeyhun Aghazada