Middle East Conflicts Wipe Out Almost Half of World's Oil Supply

Global oil security is increasingly precarious due to conflicts in regions that produce nearly half of the world's oil supply. The Middle East, Ukraine, and other areas are embroiled in hotspots that compromise physical oil supplies, leading to rationing and emergency releases worldwide.

The situation raises concerns about long-term oil supply security and the limitations of diversification efforts. The war in Ukraine has seen Ukrainian forces bomb Russian refineries with drones, disrupting fuel exports and causing shortages beyond Russia's borders.

Meanwhile, the Gulf states' refined fuels export capacity is also under threat due to shrinking global refining capacity, which has decreased by 10% since the Middle Eastern conflicts began. Analysts warn that addressing the crisis in fuels, rather than crude oil, is crucial but difficult given the reduced capacity.