The war between the United States, Israel, and Iran has caused the oil and gas import bill of the world to swell by as much as $330 billion over the six months between March and August. That’s despite a smaller-than-feared oil price climb and equally smaller-than-feared rise in gas prices. However, the war is not over yet. The bill could swell further.
The data comes from the Finland-based climate think tank Centre for Research on Energy and Clean Air, and it refers to money paid to import oil, fuels, and LNG versus what analysts had forecast as prices for the period. The outlet called the Persian Gulf disruption the biggest one since the 1990 Gulf War, with the European Union the region to suffer the most financial pain.
The biggest share of the total extra import bill came from crude oil, which accounted for $164.1 billion of the total. Next came diesel and gasoil, which accounted for $73.8 billion, and gasoline, which accounted for $35.7 billion of the total extra cost of energy imports. Liquefied natural gas was $38 billion more expensive for importers than it could have been, and jet fuel booked an extra import cost of $20 billion.
According to the figures CREA released this week, the European Union saw its energy import bill surge by $78 billion in the six months between March and August versus what analysts expected. The reason is that the EU is highly dependent on oil and gas from abroad, notably U.S. crude and liquefied natural gas, because of its sanctions on Russian hydrocarbons and the absence of any meaningful domestic production of either oil or gas. Besides, the EU’s largest local supplier of the energy commodities, Norway, has limits to how much it can export to its partner bloc.
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Next on the list of biggest sufferers from the war’s impact on energy commodity prices was China, which paid an extra $35 billion over the six months to August. China is the world’s biggest crude oil importer and also the world’s biggest LNG importer. Yet China severely shrank its imports after prices surged in the wake of the first U.S. and Israeli strikes on Iran. Indeed, many analysts argue that China, in a way, saved the world from an oil price crisis by reducing imports and tapping its massive stockpiles, estimated at between 1 billion and 1.4 billion barrels as of the start of the year.
India suffered the third-strongest financial impact of the war, having to pay an extra $22 billion for its energy imports over the period under review. This is not a surprise since India is even more dependent on oil and gas imports than the member states of the European Union. India is especially dependent on oil imports, much of which it used to import from the Middle East. This made it directly vulnerable to the export flow disruption caused by Iran’s closure of the Strait of Hormuz in response to the U.S. and Israeli strikes.
