Fatih Birol, head of the International Energy Agency, said in March that the world was about to face the greatest global energy security threat in history. The agency expects the oil and refined-fuel crises to continue into 2027.
Middle East conflicts and the Russia-Ukraine war have restricted global oil and gas output. Critical shipping lanes remain disrupted, and firms and governments are under pressure on commercial and strategic reserves. Crude oil passed US$100 a barrel this month. Diesel in the United States and Europe passed US$200 a barrel. Diesel accounts for a third of global oil use.
The IEA calculated that in August diesel exports from the Middle East fell to a quarter of the volumes recorded before the US-Israel-Iran war. Gas prices have risen 160 percent since that war. IEA members coordinated the release of 400 million barrels of emergency oil reserves, and China withdrew from buying crude. Higher fuel prices are bringing shortages, faster inflation, tighter food and critical supplies, and rising costs in shipping and manufacturing. Central banks are raising interest rates, and the energy shock is expected to weigh on global growth. The surge has also fed political protests and instability in many poor countries.
Refining is a separate bottleneck. The IEA reported that global diesel supplies will stay restricted far into 2027 as countries try to rebuild falling stockpiles. The United States is the world's largest oil refiner, followed by China and Russia. Russia's refinery capacity has been reduced by 30 percent because of drone attacks from Ukraine.
The United States is the largest oil producer, ahead of Saudi Arabia and Russia, at about 13.6 million barrels a day. Adding natural gas liquids and petroleum products lifts US output to 21 million barrels a day, 22 percent of global supply. The United States is also the largest consumer, and China is second. As a region, the Middle East was the largest producer, with 31.5 percent of global crude oil plus condensate and 27 million barrels a day, according to the IEA. North America was second, at 20.6 million barrels a day, or 24.0 percent. Qatar is the world's second-largest producer of liquefied natural gas.
Oil's share of global energy needs is now 30 percent or below. Many countries hold large strategic reserves, liquefied natural gas supply is substantial, and renewable sources have expanded. Forward-planning countries including South Korea, Singapore, Japan and China hold large stockpiles; China has built the largest emergency reserves. The United States is drawing down strategic reserves for short-term relief, and its domestic inventories have fallen to historical lows as it faces pressure to supply more oil to the world.
In June, China banned exports of refined oil, later restarted them, and will restrict them again if the situation worsens. Iran and the United States signed a deal in June to extend their war truce and reopen the Strait of Hormuz, which carries oil from the Gulf to world markets. The deal soon collapsed.
US President Donald Trump has announced a temporary "energy ceasefire" between Russia and Ukraine and eased sanctions on Russian fuel to help lower rising oil prices.
Countries with little local oil production, weak refining, limited strategic reserves and slow moves toward alternatives are described as the hardest hit. Oil-import-dependent developing countries that have not built renewable alternatives and substitutes, such as South Africa, are presented as the most threatened.