Empty ships and shut wells: Why the Iran war oil crisis is not over yet | Oil and Gas News

After 40 days of fighting, the United States and Iran agreed to a two-week ceasefire on Wednesday morning, with negotiations expected to begin on Friday in Pakistan’s capital, Islamabad.

One of the key points in Iran’s 10‑point proposal is allowing shipping to resume through the Strait of Hormuz, through which 20 percent of the world’s oil and gas is shipped during peacetime, but which has been in effect closed almost since the start of the war, causing global oil and gas prices to soar.

Following the announcement, oil prices – which remained well above $110 for much of the war – dropped to $92 on Wednesday.

Over the past six weeks, more than 100 countries have raised prices at petrol pumps. Several governments, mostly in Asia, have declared national energy emergencies and introduced strict measures to limit consumption, including work-from-home policies, shorter working weeks, fuel rationing and curfews.

Continued uncertainty and logistical limitations

While reopening the Strait of Hormuz provides a vital release valve for energy, delays in restarting production and transport mean the energy crisis is far from over.

For ships to continue operating, they need certainty about security during the next two weeks of the ceasefire.

Even with the waterway reopened, it will take weeks for large oil tankers – now scattered thousands of miles away – to return to the Gulf to collect the millions of barrels sitting in large reservoirs.

With very few tankers able to load or unload and their onshore storage full, producers began shutting wells, causing regional oil output to plummet despite efforts to reroute limited volumes via overland pipelines. Restarting the wells is not like flipping a switch; it is expensive and technically demanding.

Economists and agricultural experts warn that the true impact on grocery bills will likely persist throughout 2026 and into 2027. Additionally, it will take years for the Gulf energy industry to repair facilities damaged or destroyed during the war.

How much oil has been lost due to the Iran war?

Shipping data from Kpler, a data and analytics firm which tracks commodity markets, analysed by Al Jazeera’s Open Source Unit, show that combined exports from Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates fell from 469 million barrels in February to 263 million barrels in March  – a decline of 206 million barrels, or 44 percent.

The drop was sharp but uneven across the six countries, with some nations hit far harder than others, depending on their port locations and pipeline alternatives.

Which oil producers have been hit hardest?

Iraq’s crude exports have been hit the hardest, falling 82 percent from 94m barrels in February to 17m in March.

Kuwait and Qatar each lost roughly three-quarters of their crude shipments, with 75 and 70 percent declines, respectively.

Saudi Arabia and the UAE managed a smaller proportional decline of 34 and 26 percent respectively, partly offset by floating storage and pipelines that avoid the Strait of Hormuz.

Oman was the sole outlier, with many of its ports outside the Strait. Its exports rose by 16 percent, from 25 to 29 million barrels, helping only slightly to make up the overall shortfall.

How many oil tankers could the 206 million barrels fill?

The 206 million barrels of Gulf oil that have been lost since the start of the war would fill approximately 103 Very Large Crude Carriers (VLCCs), the workhorse supertankers of the global energy trade.

VLCCs are among the largest and heaviest ships on the ocean and are built to carry about two million barrels of crude across the world’s oceans. Only the Ultra Large Crude Carrier (ULCC) vessels are larger with a carrying capacity of three million barrels.

ULCCs are less common than VLCCs because they have a depth of at least 24m (80 feet), making them too deep to navigate most of the world’s waterways and global ports.

How big are very large crude carriers?

To put that in perspective, a single VLCC stretches nearly 330 metres (1,080 feet) in length, nearly the same height of the Eiffel Tower in Paris.

While there are cruise ships that are technically longer, VLCCs are the largest in terms of displacement and weight-carrying ability.

VLCCs are typically 50-60 metres (164-197 feet) wide and, when fully loaded, have a depth of 20-22 metres (66-72 feet).

How much petrol can one barrel of oil produce?

A barrel of crude oil contains 159 litres or 42 US gallons.

Once refined, a barrel typically produces about 73 litres (19.36 gallons) of petrol or gasoline, with the remainder producing diesel, jet fuel, and other products.

To put that in more practical terms, if you drove a pick-up truck that averages 24 miles per gallon (or 10 litres per 100km), one barrel of crude oil would carry you about 730km or 450 miles. That is about the distance from New York City to Cleveland, Ohio.

How much is 206 million barrels of oil worth?

Crude oil is graded by thickness and sulphur content. Oil with a low sulphur amount is known as sweet crude and is more valuable because it requires less refinement.

The global benchmark is known as Brent crude, which is drilled out of the North Sea between the United Kingdom and Norway. West Texas Intermediate (WTI), which is sourced from Texas, is the US benchmark.

Oil is traded as a global commodity, which means any disruption can have a knock-on effect regardless of where a country actually buys its oil from.

For much of the war, oil has traded above $100 per barrel, hitting a peak of nearly $128 on April 2.

Before the US-Israel war on Iran began on February 28, the average price of Brent was roughly $65 per barrel.

The graphic below shows the value of 206 million lost export barrels at various oil prices.