A Billion Barrels of Crude Production Lost to Middle East Conflict, IEA Says

---

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

---

Summary

There is an "unprecedented supply shock" from conflict in the Middle East, the International Energy Agency says. Some 14 million barrels per day of oil are shut in.

---

Oil Inventories Collapsing

The global energy space is out more than 1 billion barrels of crude oil because of the supply shock caused by war in the Middle East, the International Energy Agency said on Wednesday.

Industrial Info Resources data show $187.2 billion of active oil and gas production projects across the Middle East.

"More than ten weeks after the war in the Middle East began, mounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace," the Paris-based International Energy Agency (IEA) reported in its monthly market report for May.

Industrial Info Resources has followed events since the start, from refinery issues to shortages of liquefied natural gas (LNG). On Wednesday, it was reported that parts of the Bandar Abbas Refinery in Iran will remain closed until at least June, while the Bahrain Petroleum Company was able to restart some distillation units at its Sitrah Refinery after suffering damage during the height of the conflict in March.

Late April saw prospects of a lasting truce, with support from Pakistani mediators. U.S. President Donald Trump has all-but abandoned efforts now, leaving dueling U.S.-Iranian blockades of the pivotal Strait of Hormuz in place.

"With Hormuz tanker traffic still restricted, cumulative supply losses from Gulf producers already exceed 1 billion barrels with more than 14 million barrels per day (bpd) of oil now shut in, an unprecedented supply shock," the IEA stated.

Refinery operators, meanwhile, are coping with damage to infrastructure and the lack of available feedstock. Throughput is on pace to drop 4.5 million bpd during the second quarter.

U.S. Spared, But Still Impacted

On Tuesday, the U.S. federal government reported that inflation to April was the highest level in three years, with the energy component of the Consumer Price Index accounting for the bulk of the increase. By Wednesday, the price of Brent crude oil, the global benchmark, was holding steady at around $107 per barrel, while U.S. retail gasoline prices increased 1 cent overnight to $4.51 per gallon, according to AAA.

Asked about the issue on Tuesday, Trump said he wasn't concerned about the financial pressures from runaway commodity prices.

"The only thing that matters, when I'm talking about Iran, they can't have a nuclear weapon," he said. "I don't think about Americans' financial situation."

In the U.S. market, the world's largest, the U.S. Energy Information Administration reported in its monthly market report for May that oil disruptions have increased sharply since last month's report, despite some tentative signs of peace.

The May report found domestic producers are largely insulated from the conflict. Total inland crude oil production is expected to average 11.23 million bpd in 2026, compared with the EIA's estimate in January, before the outbreak of war, of 11.11 million bpd.

The EIA found Brent averaged $117 per barrel last month, compared to $68 per barrel during the same period in 2025. The agency expects Brent to average $94.85 this year, compared to the January forecast of $56 per barrel.

With the energy index weighing most on consumer-level inflation, retail gasoline prices are expected to average $3.88 per gallon this year. The EIA in January estimated gas prices would average $2.92 for 2026.

By the Numbers

• $107 Brent, compared to January forecast of $56 per barrel
• $4.51 for a gallon of gas in the U.S. market

Key Takeaways

• IEA sees the market shocks as "unprecedented."
• U.S. inflation to April was the highest in three years.

---

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).