Oil markets are set for yet more chaos on Monday as the war in Iran unleashes unprecedented disruption: major producers are curbing output as storage fills up and the most important waterway for global energy markets remains all but closed.
The United Arab Emirates and Kuwait have already started reducing oil production as storage runs out, joining Iraq, whose output is now down about 60%. Others may be forced to follow as oil tankers continue avoiding the narrow Strait of Hormuz, rapidly reducing the number of empty ones available for loading. Once all the vessels are taken, the region’s remaining on-land storage will fill even quicker.
