Middle East Oil Market Grinds to a Halt Amid Ongoing Conflict
The Middle East oil market is facing an uncertain future as the ongoing conflict continues to disrupt energy supplies. More than five months after the US and Israel launched military strikes against Iran, the region's energy sector appears weaker and more vulnerable.
Shipping routes are increasingly constrained, energy infrastructure is coming under attack, and importers are beginning to avoid supplies from the region that accounted for a fifth of global oil and liquefied natural gas exports before the war.
The conflict has expanded in recent weeks from the Strait of Hormuz to the Red Sea, with Yemen's Iran-backed Houthi militia declaring an embargo on Saudi exports. This has severely complicated shipments from Saudi Arabia's west coast, which emerged as a critical alternative route after Hormuz was effectively shut earlier this year.
The result is a dramatic decline in Middle East exports, with combined exports from the gulf and Saudi Arabia's west coast slipping to around 6.2 million barrels per day, less than half the wartime peak of 13.4 million bpd hit in late June.