Global Energy Crisis 2024-2026

Slide 1: Global Energy Crisis 2024-2026

The Middle East Conflict's Unprecedented Impact on Oil and Gas Markets: Analysis of Price Surges and Emergency Response

Slide 2: Contents

1. Conflict Escalation: Regional war closes Strait of Hormuz, the world's most critical energy chokepoint handling major OPEC exports.
2. Price Shock Analysis: Oil prices surge from $60 to $120 per barrel in three weeks, creating unprecedented market volatility.
3. Infrastructure Damage: Missile strikes on production facilities cause long-term capacity losses across Iran, Qatar, and regional producers.
4. Global Response: International emergency measures, supply chain disruptions, and economic impacts affecting markets worldwide.

Slide 3: Conflict Escalation: Closing the World's Most Critical Energy Chokepoint

1. Strategic Importance: The Strait of Hormuz handles 20% of global oil supply and serves as the primary export route for the majority of OPEC member countries' energy shipments.
2. Transit Collapse: Vessel movements through the strait declined by 95% from normal operational levels following the initial military attacks in March 2026.
3. Infrastructure Targeting: Iran-Israel tit-for-tat missile strikes expanded from naval targets to direct attacks on critical oil and gas production facilities and export terminals.
4. IEA Assessment: The International Energy Agency declared this the 'greatest threat to global energy supply in history', surpassing all previous oil crises.

Slide 4: Oil Price Shock: From $60 to $120 Per Barrel in Three Weeks

1. Initial Spike: Strait closure triggered prices above $100/bbl for the first time since 2022 Russian-Ukraine crisis.
2. Peak Crisis: Thursday strikes on South Pars gas field caused temporary surge to nearly $120/bbl, double February levels.
3. Forecast Disrupted: J.P. Morgan's pre-crisis forecast of $60/bbl shattered by geopolitical "wild card" that markets underestimated.

Slide 5: Natural Gas Crisis: Qatar's 17% Capacity Loss Reshapes Global LNG

1. 20% — Qatar's Share of Global LNG Supply
2. $20B+ — Estimated Damage to Export Facilities
3. 5 Years — Projected Capacity Offline Period
4. Production Facility Strike: Israeli strikes on Qatar's largest LNG export facility caused extensive structural damage requiring multi-year reconstruction efforts.
5. Force Majeure Declared: QatarEnergy CEO announced 17% capacity reduction and declared force majeure on existing contracts with European and Asian buyers.
6. South Pars Field Damage: The world's largest natural gas field, jointly controlled by Iran-Qatar, sustained heavy damage from coordinated missile strikes.

Slide 6: Supply Disruption Scale: 8-10 Million Barrels Per Day Offline

1. 8M bpd Loss: Global oil supply dropped by 8 million barrels per day in March 2026 due to Strait of Hormuz blockade and production shutdowns.
2. 10M bpd Cuts: Middle East Gulf countries forced to cut production by 10 million bpd due to storage constraints and infrastructure damage.
3. 200K+ TEU Trapped: Estimated 200,000+ TEU of shipping capacity remains trapped in Gulf region, unable to return to origin markets.
4. Depression-Level Risk: Analysts warn disruption equals COVID-2020 demand loss scale, but without pandemic context - potentially 'depressionary' not just recessionary.

Slide 7: Damage Assessment Overview

1. Strategic Targeting: Coordinated missile strikes on oil refineries, gas fields, and export terminals across Iran, Qatar, Kuwait, and Saudi Arabia.
2. Iranian Capacity: Iranian oil production remains 2 million bpd below pre-conflict capacity with no timeline for restoration to full output levels.
3. Critical Infrastructure: Key targets include South Pars gas field, Qatar LNG facilities, Haifa refinery, and Kuwait refinery installations.
4. Long-Term Impact: Damage assessment shows infrastructure is not 'easily reversible' - sustained higher prices expected with years required for rebuilding.

Slide 8: Global Supply Chain Breakdown: Air and Ocean Freight in Crisis

Gulf hub capacity severely reduced, forcing airlines to reroute services and limit network coverage

Asia-Europe corridor rates surged 50%+ week-over-week as cargo redirected via China and Hong Kong gateways

Spot pricing increasing at even faster pace than contract rates

War risk and fuel surcharges adding significant cost pressure with shortened rate validity periods

Port congestion at critical levels with some locations operating at or near full capacity

Vessel waiting times extended well beyond normal operational ranges

200,000+ TEU equipment trapped in Gulf creating empty container shortages in Asia

Bunker cost increases forcing reduced sailing speeds, adding further transit time variability

1. Gulf hub capacity severely reduced, forcing airlines to reroute services and limit network coverage
2. Asia-Europe corridor rates surged 50%+ week-over-week as cargo redirected via China and Hong Kong gateways
3. Spot pricing increasing at even faster pace than contract rates
4. War risk and fuel surcharges adding significant cost pressure with shortened rate validity periods
5. Port congestion at critical levels with some locations operating at or near full capacity
6. Vessel waiting times extended well beyond normal operational ranges
7. 200,000+ TEU equipment trapped in Gulf creating empty container shortages in Asia
8. Bunker cost increases forcing reduced sailing speeds, adding further transit time variability

Slide 9: Economic Ripple Effects: From Fuel Pumps to Global Recession Risks

1. ⛽ Consumer Impact: US gasoline prices reached $3.57/gallon (Texas), highest levels in years. Reuters/Ipsos poll shows 55% of Americans report financial impact from rising gas prices.
2. 🏭 Industrial Costs: Air Products reports European operations "significantly impacted" by rising energy costs. Manufacturing sectors facing margin compression across all regions.
3. 🚚 Supply Chain Costs: Transportation and fuel surcharges adding 50%+ to shipping costs. Emergency surcharges for war risk and network disruption spreading across trade lanes.
4. 📉 Inflation Pressure: Energy cost increases rippling through all economic sectors. Central banks facing difficult decisions on monetary policy amid supply-driven inflation.
5. ⚠️ Depression Risk: IEA warning: Potential for global depression-level economic impact if disruption continues. Financial markets underestimated severity of conflict.

Slide 10: Emergency Response Measures: International Policy Actions

1. IEA Demand Management: Work from home recommendations, reduced driving speeds, and sparing use of gas appliances to alleviate immediate price shocks.
2. EU Emergency Actions: Coordinated measures to curb energy costs and ease market impact, including potential price caps and supply aggregation.
3. US-India Trade Deal: Lower US tariffs contingent on India reducing Russian oil imports. 70% of Russian crude now under sanctions, redirecting flows to China.
4. Strategic Reserves: Strategic petroleum reserve releases under active consideration by multiple countries to stabilize domestic markets.
5. Supply Diversification: Countries urgently seeking alternative LNG sources and establishing new trade routes to bypass Middle East chokepoints.
6. Trade Flow Shifts: Global crude trade patterns rapidly reshuffling with Russian oil to China, alternative Middle East routes via Red Sea under development.

Slide 11: Unprecedented Crisis Demands Global Action

Unprecedented Crisis Demands Global Action The energy crisis represents a worst-case scenario requiring immediate international cooperation on supply alternatives, demand management, and conflict de-escalation.