The Chief Executive Officer of the Chamber of Oil Marketing Companies (COMAC), Dr Riverson Oppong, has warned that continued disruptions to major global oil supply routes could force Gulf oil producers to cut crude oil production by as much as 60%.
The warning comes amid growing concerns over global crude oil supply, following disruptions to shipments through the Strait of Hormuz and reported drone attacks targeting oil infrastructure in Saudi Arabia.
The developments have increased pressure on global energy markets and contributed to rising crude oil prices as traders assess the potential impact on petroleum supplies.
Strait of Hormuz Disruptions Threaten Global Oil Supply
Speaking on Channel One TV’s The Point of View on Monday, September 14, Dr Oppong said the disruption to crude oil transportation is creating major challenges for oil-producing countries.
According to him, producers could be forced to reduce output if they are unable to transport or store the crude oil they produce.
He explained that prolonged disruptions could leave Gulf producers with insufficient storage capacity, making it difficult to maintain current production levels.
Dr Oppong said the situation could eventually result in a significant reduction in Gulf crude oil production, potentially reaching 60%.
Middle East Refinery Output Under Pressure
The COMAC CEO also disclosed that disruptions to oil supply routes are already affecting refinery operations in the Middle East.
He noted that refinery throughput has declined, with the impact extending to the production of petroleum products such as diesel.
The reduction in refinery activity could further tighten the supply of diesel and other refined petroleum products, potentially increasing pressure on fuel markets around the world.
The Strait of Hormuz remains particularly important to global energy markets because it is a major transportation route for crude oil and liquefied natural gas (LNG).
Global Energy Supply Faces Multiple Risks
Dr Oppong further pointed to disruptions affecting Russian diesel and petrol supplies as another factor putting pressure on the international energy market.
He described the combination of disruptions affecting major oil-producing and oil-transit regions as an unprecedented development with potentially serious consequences for global energy security.
The simultaneous pressure on Gulf supply routes and other major petroleum sources could reduce the availability of crude oil and refined products on the international market.
Possible Impact on Ghana Fuel Prices
Dr Oppong warned that countries that rely heavily on imported petroleum products could face significant challenges if the global supply disruptions persist.
Ghana, like many African countries, depends substantially on imported refined petroleum products. Any prolonged increase in international crude oil prices, shipping costs or refined fuel prices could therefore place additional pressure on the domestic petroleum market.
A sustained disruption could affect fuel prices, diesel prices, petrol prices and transportation costs, depending on the duration and severity of the global supply constraints.
Energy market developments are therefore expected to remain closely monitored as international oil traders and governments assess the potential impact of the disruptions on global crude oil supply and petroleum product prices.
Source: newsthemegh.com