Global Oil Security Looks Shakier as Conflicts Hit 45 Million Bpd of Supply
Almost half of the world’s oil supply is produced in regions currently engaged in hot conflicts, Reuters reported this week. The situation raises questions about long-term oil supply security and the limits to diversification.
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Key Facts
- Fact 1: Addressing it, however, would be quite difficult because the world’s refining capacity has shrunk considerably over the past decade or so, specifically in Europe, which is now struggling with the consequences of those developments, with diesel prices 70% higher than they were in February due to the continent’s dependence on imported fuels.
- Fact 2: In September, Canadian crude oil production may drop by 300,000 barrels daily due to maintenance activities in the oil sands, Rystad Energy said this week.
- Fact 3: Unfortunately, crude in storage is also lower than usual—the lowest in 12 months, per the report.
- Fact 4: The July daily average stood at 1.16 million barrels, down from 1.2 million barrels in June.
Almost half of the world’s oil supply is produced in regions currently engaged in hot conflicts, Reuters reported this week. The situation raises questions about long-term oil supply security and the limits to diversification.
The Middle East, of course, is the most obvious and most disruptive example. While oil prices on speculative markets have remained capped by trader optimism, the physical supply of the vital energy commodity has been severely compromised, leading to rationing and emergency releases from storage across the world. Meanwhile, Ukraine is pursuing a campaign of bombing Russian refineries with drones in a bid to persuade Moscow to make concessions regarding their conflict.
(Original synthesis pending human/AI review — generated by the stub provider by selecting real sentences from the source material, not by writing new analysis or commentary.)
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