WEB DESK: Oil-exporting nations in the Gulf have suffered an estimated $15.1 billion decline in energy revenues since tensions escalated following US and Israeli military actions against Iran.
According to a report by the Financial Times. The losses come as large volumes of oil shipments have been disrupted due to severe restrictions in the Strait of Hormuz.
Data from commodity analytics firm Kpler shows that the strategic waterway normally carries around $1.2 billion worth of crude oil, refined fuels, and liquefied natural gas (LNG) every day, based on average volumes and prices projected for 2025.
The disruption intensified after fighting escalated on February 28, causing maritime traffic in the Strait to nearly stop. Iranian attacks on ships and sharply rising insurance costs have further discouraged vessel movement through the route.
The financial setback underlines how heavily Gulf economies rely on oil and gas exports to fund government spending. Kpler analyst Florian Gruenberger said shipping activity through the Strait has dropped to “almost negligible” levels compared to normal conditions, with crude oil accounting for roughly 71 percent of the stranded cargo value.
As the region’s biggest oil exporter, Saudi Arabia has experienced the largest losses, estimated at $4.5 billion, according to consultancy Wood Mackenzie. However, the kingdom plans to increase shipments via the Red Sea to limit the financial impact.
Peter Martin, head of economics at Wood Mackenzie, warned that Iraq is especially exposed to the disruption because oil sales generate about 90 percent of its government income.
Meanwhile, Kuwait and Qatar also face risks from the halted trade, though their large sovereign wealth funds may help absorb short-term financial pressure.
Kpler estimates that roughly $10.7 billion worth of crude oil, refined products, and LNG shipments are currently stranded near the Strait and unable to reach global markets. Some cargoes were already sold through long-term agreements, meaning revenue could still be received depending on payment terms, which generally range between 15 and 30 days after shipment.
Antoine Halff, co-founder of satellite analytics firm Kayrros, said Saudi Arabia may cope better with the situation than Iraq because it maintains oil reserves in overseas storage facilities. He added that higher global oil prices might also partially offset the kingdom’s losses, though consumers worldwide particularly drivers may feel the burden through increased fuel costs.
State energy giant Saudi Aramco has indicated it could redirect about 70 percent of crude exports from eastern oilfields to the Red Sea using the East-West pipeline, although analysts note the pipeline has never previously operated at that maximum capacity.
Wood Mackenzie estimates that Gulf producers including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Bahrain have collectively postponed around $13.3 billion in oil export sales and related tax income.
Meanwhile, QatarEnergy, the state energy firm of Qatar, has recorded approximately $571 million in lost revenue after suspending production on March 2, a figure that does not yet include potential delays to planned expansion projects or new facilities.
