The ongoing wars and regional conflicts in the world have put global oil supply and shipments under extraordinary pressure. Countries affected by various conflicts account for a large share of global oil production, due to which the effects of any major supply disruption can reach the global energy market.
According to Reuters, the countries affected by these conflicts produced a total of about 45 million barrels of oil per day in 2025. This amount constitutes more than 43% of global oil supply. These figures are compiled based on data from the International Energy Agency (IEA).
The ongoing war with Iran has further complicated the situation. The Strait of Hormuz is a key route for global energy trade, but the recent conflict has cut oil shipments through the strait to a record low. Reuters estimates that the current situation could cut oil shipments from the Gulf by about 5 to 7 million barrels per day.
The IEA’s August report also paints a clear picture of the pressure on the global oil market. According to the organisation, global oil production in July was 101.5 million barrels per day, but this was 6.3 million barrels per day lower than the level a year earlier. About 8.3 million barrels per day of production in the Gulf region was also shut down.
The situation is not limited to crude oil production. The wars have also affected the supply of refineries and petroleum products. According to the IEA, global refinery throughput in July was 80.9 million barrels per day, which is about 5 million barrels per day lower than last year. The disruption of product exports in the Middle East and attacks on Russian refineries also contributed to the decline.
The war between Russia and Ukraine has also created new problems for the global energy market. Attacks on Russian refineries and energy infrastructure in Ukraine have affected Russia’s refining activities. This has increased pressure on the global availability of refined petroleum products, including diesel.
The ongoing instability in Libya and US sanctions on Venezuelan oil exports have also increased uncertainty in the global market. All of these factors have increased the importance of alternative sources of supply.
The global situation is of particular importance for countries that rely on imported fuels, such as Pakistan. Rising prices for crude oil or refined products in the global market could increase pressure on import bills, local fuel prices and transport costs.
However, the global market has so far created some alternative supply routes. Saudi Arabia and some Gulf countries have stepped up efforts to use alternative routes to reduce dependence on the Strait of Hormuz. Refineries in the United States and India are also partially filling the gap in global supply.
Nevertheless, the continued decline in global oil inventories is a cause for concern. According to the IEA, global observed oil inventories fell by 69 million barrels in July. Total reserves have fallen by about 410 million barrels since the start of the war.
The current situation shows that the real threat to the global oil market is not just a decline in crude oil production but also the ability to transport, refine and deliver it safely and continuously.
If tensions in the Middle East do not subside and attacks on energy infrastructure due to the Russia-Ukraine conflict continue, supply pressure on the global market could persist. As a result, volatility in oil and petroleum product prices is likely to increase further.
According to the latest IEA estimates, global oil supply is expected to fall by an average of 4.3 million barrels per day in 2026, while a significant recovery is expected in 2027 if conditions improve.
This situation is a clear message to the global economy that energy security is no longer just a matter of increasing production. Safe sea routes, alternative supply chains, adequate reserves and a reduction in regional tensions have also become equally essential for global energy stability.
We welcome your contributions to The Pakistan Observer. Submit your blogs, opinion pieces, press releases and news features to our editorial team.
Please send your submissions to our News Desk or Editorial team. We look forward to hearing from writers, journalists and contributors.
