Hormuz, Bab al-Mandeb and Saudi pipeline disrupted, worst oil crisis in 36 years
Disruptions on three major oil routes, including a drone-hit Saudi pipeline, have pushed output to a 36-year low, with India among nations likely to be hit
India has long been among the world's largest importers of oil. Apart from Russia, most of the country's crude requirement is met by Gulf nations. But unrest in the Gulf has been steadily hitting supply. Since February, the Strait of Hormuz, one of the key sea routes for oil supply, has been shut due to the conflict between Iran and the United States, badly disrupting traffic on that route. Other routes have now also been affected, which is expected to have a major impact on India and several other countries.
The Strait of Hormuz is counted among the world's main oil supply routes, carrying about 20 percent of the world's oil. Meanwhile, Houthi rebels, through intense attacks, have come very close to seizing another key oil route called Bab al-Mandeb.
Both these routes have been under strain for some time. Saudi Arabia has now also shut down another major supply system. Continuous drone attacks on Saudi Arabia's East-West pipeline have forced the closure of the country's main alternative oil route. The simultaneous shutdown of three major oil routes is a matter of concern for the entire world.
Saudi Arabia is counted among the world's largest oil producing nations. It supplies oil to many countries around the world through an undersea pipeline. The country's main pipeline is around 1,200 kilometres long and, without relying on the Strait of Hormuz, carries about 40 to 50 lakh barrels of oil daily from the Arabian Peninsula to the Yanbu port on the Red Sea. This amount accounts for about 4 to 5 percent of global oil supply. If this pipeline is also shut, the oil crisis could worsen further.
According to the latest figures Britain submitted to OPEC on September 11, month-on-month production showed a sharp fall of about 19 lakh barrels a day. This sudden drop has also wiped out the brief rise in output seen in June, when production stood at around 71 lakh barrels a day.
Oil production in Saudi Arabia has fallen to its lowest level since 1990, pointing to rising tension around the world. The supply crisis has also pushed up oil prices sharply, which have stayed above 100 dollars a barrel. This is expected to have a large-scale impact on India and other countries around the world.
