Deepening Energy Crisis in Oman: What Investors and Businesses Need to Know About Supply Challenges
HOUSTON — The global energy crisis is intensifying as emergency government measures worldwide have failed to offset the significant shortfall in oil and gas supplies caused by the US-Israeli conflict with Iran, industry executives and oil ministers revealed on Tuesday.
Energy costs, including those for fertilizers and petrochemicals, are surging amid a loss of up to 20 million barrels of oil per day from Middle Eastern producers, triggered by Iran’s effective closure of the critical Strait of Hormuz shipping route. This disruption, amounting to approximately one-fifth of global oil and gas supplies, has rapidly reverberated through economies and supply chains worldwide.
United Airlines announced a potential increase in ticket prices by as much as 20%. Meanwhile, the Philippines declared a national energy emergency. The severe energy supply shock currently affecting Asia—the region most dependent on Middle Eastern energy— is expected to extend to Europe by April, according to oil executives and energy ministers speaking at the annual CERAWeek conference in Houston, the United States’ energy hub.
In response, Asian countries are implementing measures to curb energy consumption, such as instituting four-day work weeks and encouraging citizens to reduce travel and use stairs instead of elevators.
Globally, governments have released a record 400 million barrels from strategic reserves, and the US has temporarily lifted sanctions on some Iranian and Russian oil to allow refiners facing shortages to purchase these supplies.
“These are not even stopgap measures,” said Shaikh Nawaf al Sabah, CEO of Kuwait Petroleum Corporation. Kuwait, which produced about 2.6 million barrels per day before the conflict, has had to reduce production and suspend deliveries to its refiners.
Saudi Arabia and the United Arab Emirates have maintained some oil exports via pipelines that bypass the Strait of Hormuz. However, these exports and other emergency efforts fall far short of compensating for the disrupted supply, Al Sabah emphasized. Collectively, the emergency measures are “not even a drop in the proverbial barrel.”
Japan’s Vice Minister for International Affairs, Takehiko Matsuo, noted that coordinated releases from strategic reserves are insufficient to resolve supply shortages. Japan is contributing around 80 million barrels to the International Energy Agency (IEA)-coordinated stock release but currently holds only about three weeks’ worth of gas in storage.
European officials warned that supply shortages could reach the continent in April if the conflict persists. German Economy Minister Katherina Reiche and Shell CEO Wael Sawan both stressed the urgency of preparedness.
“We are working with governments to alert them about various levers they will need to pull, including demand management, storage strategies, and purchasing policies,” Sawan stated. He added that Europe and other regions are struggling due to a lack of preparation, describing the current situation as reactive rather than strategic.
“The best energy strategies look five to ten years ahead to build resilience,” Sawan added.
In the United States, the world’s largest oil producer, increasing output significantly before 2027 will be challenging regardless of prices, according to ConocoPhillips CEO Ryan Lance. US producers are committed to spending plans made earlier this year that limit their ability to adjust rapidly.
Furthermore, the US, the largest liquefied natural gas (LNG) producer globally, cannot make up for the Middle East’s supply shortfall, as LNG facilities are already operating at full capacity. Matt Schatzman, CEO of US LNG producer NextDecade, underscored that this crisis “is not going to be solved overnight.”
“This is a bad situation. We would move faster if we could,” Schatzman concluded.
— رویترز
تحلیل ویژه از عمانت | بازار عمان را کشف کنید
The deepening global energy crisis, driven by a significant supply shortfall from the Middle East, represents both a major risk and opportunity for Oman’s energy sector. While soaring energy costs and disrupted supply chains threaten regional stability, Oman can leverage its strategic position and resources to attract investment in energy production and diversify into alternative energy solutionsسرمایهگذاران هوشمند باید روی موارد زیر تمرکز کنند: long-term resilience strategies and innovating within energy markets, anticipating sustained supply constraints and heightened global demand.
