Over 43% of World's Oil Now Sourced From Conflict Zones, Analysis Shows

An analysis of production data shows that nearly half of the world's oil now originates from countries affected by conflict, a historic high that underscores the severity of the current energy crisis. According to Reuters calculations using 2025 data from the International Energy Agency (IEA), nations embroiled in conflict produced approximately 45 million barrels per day (bpd), accounting for more than 43% of total global supply.

A Convergence of Crises

The surge in supply risk follows several overlapping geopolitical events. The conflict in Iran, triggered six months ago by U.S. and Israeli attacks, has evolved into what the source material describes as the largest oil supply crisis on record. This is compounded by the long-running Russia-Ukraine war, which has curtailed production and refining operations.

Further strains on the market include ongoing instability in Libya and U.S. restrictions on Venezuelan crude exports. While not all disruptions occurred simultaneously, analysts estimate the current supply shortfall from the Gulf alone stands at 5 million to 7 million bpd.

Market Impact and Economic Fallout

The conflicts have significantly impacted downstream operations, cutting global refining capacity by approximately one-tenth. Ukrainian attacks on Russia's refining network have prompted Moscow to ban gasoline and diesel exports, tightening global fuel markets and driving up prices.

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These higher energy costs are a key contributor to persistent inflation, leading to increased borrowing costs and helping push U.S. national debt to a record $40 trillion. In the United States, diesel prices have climbed to all-time highs even with domestic refiners operating at maximum capacity.

Dwindling Safety Buffers

To mitigate the supply shock, the IEA has released record volumes from strategic petroleum reserves. However, these emergency releases are now largely complete, and global oil inventories continue to decline, leaving the market with a diminished cushion against future disruptions.

The situation has also increased the world's dependence on U.S. oil production, which itself remains vulnerable to periodic disruptions from severe weather events.