Wars sideline 9% of global oil refining capacity
Military conflicts in Iran and Ukraine have disrupted nearly 9% of global oil refining capacity. Analysts expect the fuel supply crunch to persist for months.
Conflicts in Iran and Ukraine have disabled nearly 9% of global oil refining capacity in recent months, representing the most severe disruption to fuel processing since the 2020 pandemic. Daily global demand for liquid fuels totals about 104 million barrels, making the combined outages from both wars—3.52 million barrels per day from Iran and 1.42 million from the Ukraine conflict—a significant constraint on supply. Investors face prolonged fuel shortages and record-high prices for jet fuel and diesel.
Brent Crude Oil reached $126 a barrel in April, marking a four-year high. Saxo Bank analyst Ole Hansen said damage to facilities will continue to underpin the refined product market. Global inventories have dropped by 500 million barrels to meet demand, according to TotalEnergies CEO Patrick Pouyanne, who added that the figure could rise to 1 billion barrels given the time needed to restart facilities and deliver fuel to Asia. Even if the wars end quickly, prices are expected to remain at high levels.
