{"id":93699,"date":"2026-05-02T01:34:09","date_gmt":"2026-05-02T01:34:09","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/93699\/"},"modified":"2026-05-02T01:34:09","modified_gmt":"2026-05-02T01:34:09","slug":"how-the-conflict-in-iran-is-reshaping-how-the-world-sources-its-oil","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/93699\/","title":{"rendered":"How the conflict in Iran is reshaping how the world sources its oil"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Ships and boats in the Strait of Hormuz on Friday. The blockage of the strait has forced a virtual halt to oil and gas exports from producers in the Persian Gulf.Stringer\/Reuters<\/p>\n

Oil exports from North America are surging amid the conflict in Iran<\/a>, hitting record highs in the United States as countries that usually rely on barrels currently blockaded in a crucial shipping channel scramble to find alternate supplies. <\/p>\n

The blockage of the Strait of Hormuz since the war began on Feb. 28 has forced a virtual halt to oil and gas<\/a> exports from producers in the Persian Gulf, choking off around 20 per cent of the world\u2019s supply. Instead of sailing to customers largely in the Asia-Pacific region, tankers that once traversed the globe remain stuck, their cargo stranded, with no end to the impasse in sight.<\/p>\n

While the major supply shock has driven down oil demand \u2013 it dropped 10 per cent in March, according to the International Energy Agency \u2013 the 97 million barrels being used each day have to come from somewhere, and North America is pumping out as much as it can. <\/p>\n

The U.S. became a net exporter of crude oil for the first time since 1944 last week. Its exports have almost doubled since late March, hitting 6.4 million barrels for the week that ended April 24, according to the country\u2019s Energy Information Administration, marking the highest weekly level on record.<\/p>\n

John Rapley: Will Canada choose oil and bondage to the U.S., or forge our own destiny?<\/a><\/p>\n

Here in Canada, exports out of Vancouver<\/a> increased by 60 per cent in April compared with February, said Rothit Rathod, senior oil market analyst with shipping data firm Vortexa.<\/p>\n

Tanker traffic from the U.S. Gulf Coast has picked up significantly, but the most notable change has been the shift in destination patterns, he said. <\/p>\n

In February, 54 per cent of crude exports from the region went to Europe, 30 per cent to Asia and the remainder to other destinations in the Americas and Africa. By April, half went to Asia while Europe\u2019s share dropped to 40 per cent.<\/p>\n

The destination of oil from Vancouver remained largely unchanged; the lion\u2019s share went to Asia (80 per cent in April, compared with 76 per cent in February) and the rest to the U.S. West Coast. \u201cWhat is different in April, however, is that we have incremental cargoes going to South Korea and Singapore, in addition to China,\u201d he said.<\/p>\n

Opinion: We must reopen the Strait of Hormuz. But here\u2019s how we ensure it never closes again<\/a><\/p>\n

Oil prices, meanwhile, continue their wild swings. On Thursday, Brent crude, the international benchmark, soared to a wartime record<\/a> of US$126 a barrel before a hard price reversal in late morning trading.<\/p>\n

Crude grades from the Middle East, North Atlantic and West Africa are priced \u201cat very strong premiums in the market right now,\u201d whereas North American benchmark West Texas Intermediate crude is at a comparative discount, said Susan Bell, senior vice-president of oil markets with Rystad Energy. <\/p>\n

At noon Friday, a barrel of Brent was US$114, WTI was US$102 and Western Canadian Select was just under US$82. <\/p>\n

Irving Oil\u2019s refinery in Saint John is a prime example of a potential future shift in crude flows.<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Irving Oil’s refinery in Saint John in 2019.Andrew Vaughan<\/p>\n

Prewar, Irving sourced most of its feedstock from the U.S., Nigeria, Egypt and Saudi Arabia \u2013 a cheaper prospect than Western Canadian oil, because there is no pipeline across the country. But total imports to the refinery dropped 16 per cent month-over-month in April, according to a Vortexa analysis. <\/p>\n

In past crises, refiners in Eastern Canada have tried a circuitous route for securing domestic supplies. At the start of the COVID-19 pandemic in 2020, for instance, Irving bought a tanker of crude from Cenovus Energy Inc. that was loaded at Burnaby, B.C., the terminus of the Trans Mountain pipeline. The ship travelled south, then transited the Panama Canal before heading north along the U.S. Eastern Seaboard, noted Peter Tertzakian, Calgary-based founder of Studio.Energy. A similar route had previously been plied at the time of the first oil price shock in 1973.<\/p>\n

Saudi Arabia is exporting roughly five million barrels a day out of the Red Sea, said Ms. Bell with Rystad. And Vortexa reckons Irving will continue to get crude from the Gulf state, albeit at a reduced pace from before the war.<\/p>\n

But Irving isn\u2019t counting on it. <\/p>\n

John Rapley: When an oil shock is renewable energy\u2019s best friend<\/a><\/p>\n

On March 13, the company applied to the Canadian Transportation Agency for approval to use a foreign tanker to bring Canadian oil from the Whiffen Head terminal in Newfoundland to its Saint John<\/a> refinery. (Under Canada\u2019s maritime laws, coastal trade is reserved for Canadian-registered vessels unless there are no suitable and\/or available ships.) <\/p>\n

Amid the most significant energy supply disruption in recent history, using foreign oil tankers to access Canadian crude is essential for the energy security of Atlantic Canada, Irving wrote in its application. Doing so would also ensure a reliable and diversified supply chain and reinforce the connection between Canadian producers and the Saint John refinery, it said. <\/p>\n

The company added that it was already in discussions \u201cwith Newfoundland Canadian crude producers for the prompt acquisition of Hebron crude oil,\u201d but agreements would rely on certainty of access to large ships. <\/p>\n

Irving spokesperson April Cunningham did not comment directly on the company\u2019s bid to secure oil from fields off the coast of Newfoundland, saying only that the company relies on a network of diverse, reliable and quality suppliers from around the world to remain flexible. <\/p>\n

Vortexa said it had not seen any Whiffen Head crude traffic headed to Saint John as of April 30.<\/p>\n

While the refinery is still using U.S. oil, grades from elsewhere \u201care getting very, very expensive for Irving to buy, so they would benefit by buying the Canadian grades,\u201d Ms. Bell said. <\/p>\n

The Editorial Board: The Liberals pander at the gas pump<\/a><\/p>\n

Charlene Johnson, chief executive of industry association Energy NL, said Irving\u2019s application could boost offshore oil production and help secure Canadian crude supplies. <\/p>\n

Mr. Tertzakian with Studio.Energy said the global energy crisis could finally spark some kind of permanent energy security solution in Canada.<\/p>\n

\u201cI think we need it. It\u2019s just like insurance \u2013 you don\u2019t know you need it until something happens,\u201d he said.<\/p>\n

Canada\u2019s federal government has pushed hard to diversify export markets away from the U.S. of late. That\u2019s partly in response to President Donald Trump\u2019s trade war, but in the case of energy, producers can also fetch a higher price for their oil by shipping it to markets such as Asia.<\/p>\n

Securing a higher price could become more important in the wake of the United Arab Emirates\u2019 exit from the Organization of the Petroleum Export Countries<\/a> on May 1. <\/p>\n

The UAE is the world\u2019s seventh-largest oil producer, and the third-largest within OPEC. In all, it accounts for 14 per cent of the oil cartel\u2019s output. <\/p>\n

Its move to bail on OPEC after nearly 60 years of membership reflects years of tension between Abu Dhabi\u2019s ambition to expand production and the constraints of OPEC\u2019s collective quota management. <\/p>\n

Eric Reguly: The UAE\u2019s exit marks a blow to OPEC\u2019s power. What\u2019s the future of the oil cartel?<\/a><\/p>\n

The UAE\u2019s exit won\u2019t have a significant impact on the fundamentals of the energy market this year \u2013 even if the Strait of Hormuz reopens, Simon Flowers, Wood Mackenzie\u2019s chairman and chief analyst, said in a statement. But beyond 2026, losing the UAE is expected to reduce OPEC\u2019s ability to protect prices by applying quotas to production. <\/p>\n

The oil sector in the Gulf state will now operate according to the country\u2019s economic goals, Ms. Bell said. That likely means more barrels, \u201cand potentially substantially more, because they had a lot of spare capacity.\u201d <\/p>\n

For Canadian producers, that potentially means \u201clower prices, lower netbacks, more challenging economics,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Ships and boats in the Strait of Hormuz on Friday. The blockage of…\n","protected":false},"author":2,"featured_media":93700,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[950,936,951,158,928,952,949,927,942,943,939,929,926,147,948,703,941,934,963,930,931,394,937,938,674,953,345,958,959,961,956,960,954,957,39,932,945,946,81,944,955,935,947,462,940,933,82,962],"class_list":{"0":"post-93699","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-persian-gulf","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-canada","15":"tag-canada-news","16":"tag-canada-sports","17":"tag-canada-sports-news","18":"tag-canada-trafficcanada-weather","19":"tag-canadian-breaking-news","20":"tag-canadian-news","21":"tag-economy","22":"tag-education","23":"tag-environment","24":"tag-federal-government","25":"tag-foreign-news","26":"tag-globe-and-mail","27":"tag-globe-and-mail-breaking-news","28":"tag-globe-and-mail-canada-news","29":"tag-government","30":"tag-life-news","31":"tag-lifestyle","32":"tag-local-news","33":"tag-manitoba","34":"tag-national-news","35":"tag-new-brunswick","36":"tag-newfoundland-and-labrador","37":"tag-northwest-territories","38":"tag-nova-scotia","39":"tag-nunavut","40":"tag-ontario","41":"tag-pei","42":"tag-persian-gulf","43":"tag-photos","44":"tag-political-news","45":"tag-political-opinion","46":"tag-politics","47":"tag-politics-news","48":"tag-quebec","49":"tag-sports-news","50":"tag-technology","51":"tag-travel","52":"tag-trudeau","53":"tag-us-news","54":"tag-world-news","55":"tag-yukon"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/93699","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=93699"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/93699\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/93700"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=93699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=93699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=93699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}