Shutdowns in Middle East Oilfields Threaten to Keep Prices Soaring
The war in Iran has disrupted oil exports through the Strait of Hormuz, and now major oilfields in the region are being shut down, pushing prices towards record highs.
The world's largest offshore oilfield, the Safaniya field in Saudi Arabia, has been temporarily shut down this week, adding to the supply shocks caused by the ongoing war in Iran. For nearly 70 years, this massive field in the Persian Gulf has produced millions of barrels of Arabian heavy crude, a critical component of the global oil supply. But now, its closure along with other regional oilfield shutdowns threatens to drive prices even higher, potentially surpassing the record $147.50 per barrel seen in 2008.
The war in Iran has already effectively blocked the Gulf states from exporting around a fifth of the world's oil supply through the vital Strait of Hormuz trade route. Iran's attacks on tankers trapped in the strait have erased an estimated 15 million barrels of oil from the global market, exacerbating an already tense supply situation. The combination of reduced exports and now oilfield shutdowns in the region risks compounding the supply shock and pushing prices to new record highs.
Source: The Guardian
