New Delhi — The ongoing conflict involving Iran in the Middle East is shaking global energy markets, and its impact is being felt more sharply in refined fuels like jet fuel and diesel than in crude oil itself, according to a report by Goldman Sachs Group.
Analysts noted that while crude oil prices have risen significantly, refined products have seen even steeper increases. A key reason is the disruption in supplies of medium-heavy crude — the type of oil most commonly used to produce diesel, jet fuel, and fuel oil.
The conflict, which began on February 28 and has now stretched into its third week, has severely affected oil flows through the critical Strait of Hormuz. Attacks on energy infrastructure and export routes have forced several producers to cut output and suspend refinery operations.
As a result, global supply chains are under strain. While benchmark crude prices like Brent have jumped over 40%, crossing the $100-per-barrel mark, the spike in fuel prices has been even more dramatic. In parts of Asia, diesel and jet fuel costs have nearly doubled, prompting countries such as China, Thailand, and South Korea to restrict exports to safeguard domestic supply.
Experts highlighted that nearly 60% of crude exports from the Persian Gulf are medium and heavy grades, which are essential for producing transportation fuels. With limited alternative suppliers outside the region, the disruption is particularly severe.
The ripple effects extend beyond fuels. The supply of naphtha — a key petrochemical feedstock — is also under pressure. Asia relies on the Persian Gulf for about half of its naphtha imports, while Europe sources around 40% of its jet fuel from the region.
With refinery outages, export restrictions, and ongoing geopolitical tensions, analysts warn that no region or product category is fully insulated from the impact, signaling continued volatility in global energy markets.
With inputs from IANS