In a letter sent to customers last week, Saudi Aramco, the Saudi Arabian oil and gas giant, announced that the port of oil export for April had not yet been determined. Deliveries could originate from either the Red Sea or the Persian Gulf. "I might have to call Iran to ask when the conflict will end so I can get oil," a regular Aramco customer said after receiving the letter, as the Middle East conflict entered its 3rd week.

This assessment reinforces the view that while the United States and Israel may declare an end to hostilities at any time, Iran alone will determine when the global energy supply disruption ceases.

Iran is responding to attacks by the United States and Israel by launching unmanned aerial vehicles (UAVs) and missiles at vessels in the Strait of Hormuz. Before the conflict, this strait was a transit route for about 20% of global oil and gas. The strait has been blockaded for over 2 weeks, causing the most severe supply disruption to date, according to the International Energy Agency (IEA).

A liquefied petroleum gas (LPG) tanker in Omani waters on 11/3. Photo: Reuters

US President Donald Trump has repeatedly stated that the United States is nearing victory. However, the timeframe he provided fluctuated from a few days to a few weeks.

Energy company leaders from the Middle East and Western countries agree that the United States' commitment to security is insufficient to restore production and transportation, even if fighting ends right now.

Trump previously indicated that the United States could deploy military escorts to restore traffic through the Strait of Hormuz and urged allies to send warships to protect the route. However, a senior energy official in the Persian Gulf stated that escorts alone cannot normalize operations if the United States and Israel do not reach an agreement with Tehran, such as ceasing attacks or threats against vessels. He added that his country's oil tankers would not leave port until Iran guarantees their safety.

Even if the United States and Israel declare an end to hostilities, Iran could still use UAVs to disrupt or paralyze transportation activities for many months. During meetings last week at the White House, CEOs of major energy companies, including ExxonMobil, Chevron, and ConocoPhillips, warned that global energy supply disruptions could worsen in the coming period.

Neil Quilliam, an expert at the Chatham House research institute, said that if the United States and Israel declare victory under terms Iran does not accept, Tehran will continue to cause disruption with sea mines and UAVs to demonstrate it has not been defeated.

Last weekend, a drone attacked the Fujairah oil port in the UAE. This occurred just a few hours after the United States struck military targets on Kharg island, home to Iran's main oil export terminal.

RBC Capital analyst Helima Croft noted that Tehran intends to send a message that no place is safe in this conflict and Washington cannot control the level of escalation. She warned of the risk that Iran's allies in Yemen, Iraq, and elsewhere could join the conflict. For example, Houthi forces in Yemen could exacerbate the situation by attacking Saudi Arabia's Yanbu port on the Red Sea, currently the country's only alternative oil export route.

An energy advisor to the Iraqi government stated that the crisis has eroded confidence in supply routes and exposed the region's vulnerability in protecting its energy systems. Repairs will take many months, while shipping insurance is becoming increasingly expensive and difficult to obtain due to heightened risks.

Iranian attacks have forced several refineries in Saudi Arabia, the UAE, Bahrain, and Israel to temporarily cease operations, driving oil and gas prices up by 60% in just over 2 weeks.

According to analysts, including Morgan Stanley, even if the conflict ends soon, energy markets will remain disrupted for many weeks. The energy consulting firm Rapidan Energy explained that global oil and gas companies may be slow to return to the Persian Gulf, delaying the restart of fields and potentially damaging oil reservoirs.

The blockaded shipping route has also compelled producing countries to reduce oil extraction due to inability to export. Aramco has halted production at two large offshore fields, Safaniya and Zuluf, leading to a 20% reduction in output for Saudi Arabia, OPEC's largest oil producer.

In Iraq, OPEC's second-largest producer, output has fallen by 70%. Similarly, the UAE has halved its extraction compared to pre-conflict levels, according to analysts. The total production cut in the Middle East currently stands at about 7-10 million barrels per day, equivalent to 7-10% of global demand.

Qatar has completely ceased liquefied natural gas production due to the conflict, reducing world LNG supply by 20%. They also informed customers that deliveries might not resume until May. "It's simply for safety reasons. We cannot risk lives," an industry source said.