New Delhi, March 17: The ongoing conflict in Iran is causing significant turmoil in the global oil market, potentially leading to higher prices for diesel and jet fuel compared to crude oil. This information comes from a report by Goldman Sachs Group.
According to the report, prices for several refined products, including diesel and jet fuel, are rising more rapidly than crude oil. Analysts indicate that severe disruptions in the supply of medium and heavy crude could reduce the production of diesel, jet fuel, and fuel oil.
The war between the United States and Israel against Iran has shaken the global energy market. This conflict began on February 28 and has now entered its third week, impacting the entire Middle East region.
As a result of this conflict, exports of oil and petroleum products through the Strait of Hormuz have been halted, and several energy infrastructures in the region have faced attacks. Consequently, oil producers have had to reduce production, and some refineries have ceased operations.
The report notes that since the initial attacks, crude oil prices have surged by over 40%, with Brent crude surpassing $100 per barrel.
However, the price increases for petroleum products like diesel and jet fuel have been even more pronounced. In some parts of Asia, fuel prices have doubled, prompting countries like China, Thailand, and South Korea to limit exports to protect their domestic markets.
Experts warn that no region is entirely safe from this crisis. The war has made it challenging for countries in the Persian Gulf to export refined products, leading to refinery closures and reduced supply of crude necessary for producing fuels like diesel.
Goldman Sachs’ report highlights that approximately 60% of crude oil from the Persian Gulf consists of medium and heavy crude, primarily used for producing diesel, jet fuel, and fuel oil, with limited alternatives available.
This global crisis will also impact naphtha, a key raw material used in the production of petrochemicals for various industries.
The report further states that Asia sources about 50% of its naphtha from the Persian Gulf, while Europe relies on this region for 40% of its jet fuel. Thus, this crisis could significantly affect global fuel supply and pricing.
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