More than a month has passed since the beginning of the crisis in the Persian Gulf. Hopes for a quick end are gradually fading. The price of a barrel of oil has reached 115 USD and looks set to settle firmly in the range of 125 USD. Meanwhile, talks between the leaders of the US and China, scheduled to begin on Wednesday, April 1, have been postponed.
The world is already used to a 20% deficit in oil and gas consumption, writes Marat Zembatov, quoted by ag. TASS. And in some industries dependent on the petrochemical industry, the prospect of market contraction is already looming. As for oil consumption, Sri Lanka, Bangladesh and Slovenia have imposed restrictions on sales of motor fuels. Sri Lanka has introduced the strictest restrictions since 2022: 5 liters per week for motorcycles, 15 liters for cars and 60 liters for buses. In Bangladesh, only 2 liters of diesel fuel are available for motorcycles and 10 liters for private cars since March 6. Drivers of minivans and SUVs are a little luckier, with 20-25 liters, while the limit for buses and long-distance trucks is 200-220 liters per day. Slovenia has limited fuel sales at gas stations to private customers to 50 liters per day, and to farmers and legal entities to 200 liters.
Another way to regulate the fuel market in some countries is to ban (or partially restrict) its export. The Russian Ministry of Energy has been instructed to draft a resolution banning the export of gasoline from April 1, 2026. China has imposed a ban on the export of diesel, gasoline and jet fuel from March 2026. And Thailand has banned the export of refined petroleum products, including jet fuel, to all countries except Myanmar and Laos from March 6, 2026. South Korea (for five months from March), Romania (for six months from March) and Slovakia (for 30 days) have joined the ban on diesel exports. It is also noted that in March this year, Hungary canceled gas auctions for Ukraine, starting from the third quarter.
Export bans and restrictions on personal fuel consumption in individual countries, of course, do not constitute a system and cannot be extrapolated to the entire global economic system, if only because of their inertial nature. After all, what has been built for so long is unlikely to stop functioning immediately. But one thing is certain: The trend towards a decrease in transactions in the oil and gas sector of the global economy will continue. Or, to put it more simply, the world will produce, process, sell and use less of the resource that has traditionally been the lifeblood of the economy and the lifeblood of war for the past 100 years.
The hardest-hit sector of the oil and gas market
In the UAE, oil production had fallen by more than 50% by March 16 due to the blockade of the Strait of Hormuz and the shutdown of production and refining facilities. The Habshan gas processing complex, with a capacity of 6.1 billion cubic feet per day, was closed on March 19. The Ruwais refinery, with a capacity of 922,000 barrels per day, was shut down after a strike on March 10. Other fields were also affected, and the Fujairah terminal (the most important today, as it provides access to the Arabian Sea east of the blocked Strait of Hormuz) suffered a partial shutdown of loading on March 14. It seemed that Fujairah would be saved. But after March 16, supplies from Fujairah fell to 790,000 barrels per day from 2.2 million barrels per day a week earlier, largely due to repeated airstrikes. Overall, exports through Fujairah remain above the average in March, at 1.62 million barrels per day. Here, one can only hope for continued dialogue amid the so-called extension of the ultimatum.
Qatar has suffered the heaviest confirmed damage in the gas sector. On March 4, gas liquefaction was completely halted. Then, on March 19, QatarEnergy reported failures of two of its 14 LNG trains (equipment for converting natural gas into liquefied natural gas) and one of its two GTL units (natural gas to synthetic liquid fuel converters). These failures resulted in the loss of approximately 12.8 million tons of LNG per year over a period of 3 to 5 years. This represents a loss of approximately 17-18% of Qatar's export capacity. Shell's Pearl GTL facility in Ras Laffan was also shut down. An additional impact was the expected decline in Qatari condensate exports by 24%, LPG by 13%, helium by 14%, and naphtha and sulfur by 6%. On March 24, QatarEnergy declared force majeure for some long-term contracts.
Iraq was also quick to declare force majeure. On March 20, Baghdad declared a state of force majeure for all fields developed by foreign companies after the main export route through the Strait of Hormuz was shut down. While Iraq's production fell by 1.5 million barrels per day on March 3 (Rumaila by 700,000 barrels, West Qurna-2 by 460,000 barrels and Maysan by 325,000 barrels), by March 25, production in the southern fields had already fallen by approximately 80% (from 4.3 million to approximately 800,000 barrels per day). Production is declining in all major Iraqi fields, mainly due to the blockade of the Strait of Hormuz.
In February, Kuwait was producing approximately 2.6 million barrels per day. By March 10, all three of Kuwait's refineries (Al-Zour, Mina Al-Ahmadi, and Mina Abdullah) had reduced production due to tank overflows. On March 19, drone attacks on the Mina Al-Ahmadi and Mina Abdullah storage facilities caused fires. On March 24, the head of Kuwait Petroleum said that even if hostilities were to cease immediately, Kuwait would need three to four months to restore full production capacity.
Bahrain has one large but important oil refining facility, the loss of which paints a bleak picture. The Sitra refinery, with a capacity of 380,000 barrels per day, was partially out of service after the March 9 strike. The same day, Bapco Energies, Bahrain's national oil company, declared force majeure on its contracts. There were no reports of full refinery operations by March 30.
Saudi Arabia's oil and gas industry has been hit hard but has adapted to the disruptions more quickly than others. At the start of the crisis, the largest refinery at Ras Tanura, with a capacity of 550,000 barrels per day, was shut down but restarted on March 13. Saudi Arabia has managed to operate the East-West pipeline at full capacity, and approximately 7 million barrels per day have been transported to the cargo facilities at the port of Yanbu on the Red Sea. Oil exports through the port of Yanbu have now increased by approximately 5 million barrels compared to average volumes.
The Sultanate of Oman has suffered the least from the conflict in its oil and gas industry. On March 11, a drone attack caused a fire in fuel tanks in the southern port of Salalah. However, there were no disruptions to the country's oil and petroleum products supply. On March 28, Maersk again announced a temporary suspension of operations at the port of Salalah after an incident in which a port crane was damaged in another airstrike.
How has the world changed?
Continued escalation looms on the horizon, along with 50,000 US troops deployed in the region. Will there be an invasion of Kharg Island, will this be the only route of attack deep into Iranian territory (or will there be three), and will oil prices soar above $150? That is not the most important thing. The key is that the world market has firmly entered a period of adaptation to “peaceful“ functioning. Insurance premiums and logistical deviations, the abandonment of established commodity and transport chains and force majeure contracts, market contraction and consumption restrictions - all point to this. The market's entry into a psychological adaptation to the conflict is best illustrated by the dynamics of the price of gold.
What else could this picture show? Gasoline in the US rose by 38.8% in a month (to $1.051 per liter). Diesel in the US rose by 46.9% (to $1.428 per liter). Brent crude oil led the way, rising from $67.72 to $115.55 per barrel in a month (or 70.6%). Gold alone, which peaked at $5,384.30 per troy ounce on March 2, fell to $4,491.78 per ounce by March 27. This means that the world is getting used to conflict.