Summary of the News
- Iran continues to export 1.7 to 2 million barrels of oil daily through the Kharg Terminal, capitalizing on the US-Israel conflict.
- Oil production in Gulf countries has dropped by up to 70 percent, with Iranian attacks in the Strait of Hormuz significantly impacting exports.
- From March 20 to April 19, the US has granted a 30-day exemption on Iranian oil purchases, likely increasing global oil supply.
March 22, Kathmandu – Iran has turned the ongoing conflict between the United States and Israel to its advantage, maintaining nearly 90 percent of its oil exports via the Kharg Terminal.
Despite US military strikes near Kharg Island, direct attacks on the oil terminal have been avoided due to fears of a global oil crisis. Iran has leveraged this situation to continue exports through the Kharg Terminal. Iranian “ghost fleet” tankers are reportedly supplying oil to China.
According to the International Energy Agency (IEA) and S&P Global, Iran is exporting between 1.7 and 2 million barrels of oil daily, with approximately 90 percent of the country’s oil exports moving through the Kharg Terminal.
Although exports were affected by attacks on the South Pars gas field, gas supplies have not been completely halted. Reports indicate that Iran has been collecting a war tax of about NPR 165 million per vessel from foreign ships passing through the Strait of Hormuz.
Up to 70% Decline in Gulf Countries’ Oil Production
Iranian control and ongoing attacks in the Strait of Hormuz have severely disrupted oil supplies from Gulf countries such as Saudi Arabia, Qatar, Iraq, Kuwait, and the UAE. The lack of safe maritime routes, increasing assaults, and transportation difficulties have reduced these countries’ total oil production by as much as 70 percent.
The ongoing war in the Middle East has directly affected crude oil prices. On Friday, Brent crude oil surged by 3.26 percent to $112.19 per barrel, marking the highest level since July 2022.
Sustained prices above $100 could exacerbate inflation in India, negatively impacting its market.
Five Gulf Countries Most Affected

Saudi Arabia: The world’s largest oil exporter is struggling to maintain production levels. Daily output has dropped from 10 million barrels to 8 million barrels. Oil is being transported to Yanbu via the East-West pipeline, but this is insufficient. With the closure of the Strait of Hormuz, storage tanks are full, forcing Aramco to temporarily shut many wells.
Qatar: Qatar supplies 20 percent of global LNG (liquefied natural gas). After attacks at the Ras Laffan gas facility, a force majeure has been declared, indicating uncertainty in LNG supplies. Qatar’s LNG export capacity has decreased by 17 percent, and tankers are held at ports, driving up global prices.
Iraq: Foreign companies such as BP, ENI, and Total have recalled their staff amid the conflict. Oil production fell from 4.3 million to 1.3 million barrels per day, a nearly 70 percent decline, due to the closure of the Hormuz route and no alternate pipeline options. Storage facilities are full, halting operations in major oil fields like West Qurna and Majnoon.
Kuwait: Kuwait is fully dependent on the Strait of Hormuz. Due to blockades and war taxes, exports have nearly ceased. With war taxes of approximately NPR 165 million per ship and an insurance crisis, exports have fallen to almost zero.
Kuwait has had to shut down 50 percent of its production. Tankers are stranded at ports without the ability to proceed.
UAE: The Abu Dhabi-Fujairah pipeline is operating at full capacity; however, overall demand is high. Remaining oil supplies are stuck in the Strait of Hormuz. Iranian attacks have led to insurance premiums for vessels rising by up to 400 percent, increasing trade costs and reducing activity at Fujairah port.
US Grants 30-Day Exemption on Iranian Oil Purchases
The United States is also under pressure as rising prices hit global oil and energy markets. To help control inflation, the US has issued a 30-day temporary exemption on Iranian oil purchase sanctions, effective from March 20 to April 19. This exemption applies only to Iranian oil tankers currently at sea.
US Treasury Secretary Scott Bessen announced the exemption. According to the Treasury Department website, it will be valid between March 20 and April 19.
Bessen stated, “This will temporarily open current supplies to the world, allowing approximately 140 million barrels of oil to become available more rapidly on the global market. This will increase energy availability worldwide and reduce temporary supply pressures.”
(With additional agency inputs)














