Earlier in the week, Qatar’s state-run energy firm also cut production of liquified natural gas and other energy products.
Currently, hundreds of ships containing oil and LNG are stuck off the coast of Iran, unable to pass through the Strait of Hormuz to the global market as tensions continue rising between the U.S., Israel, Iran and neighboring countries.
More than 20% of the world’s daily oil supply normally flows through the strait off Iran’s southern coast.
“On day six of the conflict, commercial traffic through the Strait of Hormuz remained virtually nonexistent,” JPMorgan Chase commodities analysts wrote in a note Friday morning. “The market is shifting from pricing pure geopolitical risk to grappling with tangible operational disruption, as refinery shutdowns and export constraints begin to impair crude processing and regional supply flows.”
Iraq has also cut production by 1.5 million barrels per day, JPMorgan’s analysts said, adding that another 4 million barrels per day overall could be disrupted by the end of next week if the situation continues.
Since the war began last weekend, the price of U.S. crude oil has surged more than 30%. In turn, that has driven up gas prices for consumers. The current national average of around $3.32 per gallon, as of Friday morning, is up nearly 35 cents from Sunday, according to price-tracking service GasBuddy and AAA.
U.S. natural gas prices also jumped more than 4% on Friday. Wholesale gas prices, called RBOB, also moved higher by 2%.
