World oil reserves are depleting at record speed amid U.S. and Israeli military action against Iran, Bloomberg reported.
“World oil reserves are depleting at record speed as the Iranian war disrupts fuel supplies from the Persian Gulf, exhausting the buffer against supply shocks“, the article said.
The rapid decline in oil reserves, it noted, increases the risk of even sharper price spikes and shortages. That leaves governments and industries with fewer options to mitigate the impact of the loss of more than a billion barrels of supply two months after the Strait of Hormuz was almost completely closed.
“The sharp depletion of reserves will also mean that the market will remain vulnerable to future supply disruptions even after the conflict ends,“ the agency reported.
The United States and Israel began striking targets in Iran on February 28, killing more than 3,000 people. On April 8, Washington and Tehran announced a two-week ceasefire. Subsequent talks in Islamabad ended in failure.
On April 21, Washington unilaterally extended the ceasefire until peace talks were concluded. At the same time, the US began a blockade of Iranian ports, promising to lift it only after an agreement was reached.
The conflict has effectively halted shipping through the Strait of Hormuz – a key route for oil and liquefied natural gas supplies from the Persian Gulf to world markets.
The war in the Middle East has negatively affected global supplies of sulfuric acid and contributed to the rise in prices, The Wall Street Journal reported.
The publication notes that sulfuric acid is the most widely used chemical in the world, used in the production of fertilizers and computer chips, woodworking, processing of copper, etc. A significant part of the sulfur enters the world market from refineries in the Persian Gulf countries, and the closure of the Strait of Hormuz made deliveries impossible.
Another factor exacerbating the problem was China's decision to impose restrictions on the export of sulfuric acid, the publication writes. Freda Gordon, director of Acuity Commodities, which monitors sulfur markets, attributed Beijing's move to concerns about food security and the need to ensure fertilizer price stability.