Who Profits from the Gulf War?

by Michael Hollister
Published at tkp.at on May 29, 2026

4.744 words * 25 minutes readingtime
For readers with less time, this analysis is also available as a compact Briefing: the same source base, condensed into the most important core points and roughly ten minutes of reading time:
B – Who Profits from the Gulf War?

The IEA Report and the New Oil Order

On April 7, 2026, the oil price reached a level the world had not seen before. North Sea Dated – the most important European crude oil benchmark – climbed to $144.68 per barrel, surpassing the previous record set in 2008. Back then, the trigger was a combination of a speculative bubble and the subsequent demand crash of the financial crisis. This time it is something different: a physical supply failure. Then it was panic. Now it is architecture.

What followed in April was no ordinary price movement – it was a study in volatility. After the all-time high, North Sea Dated fell below $100 within ten days, driven by Trump’s announcement that a deal with Iran was practically sealed and the Strait of Hormuz was on the verge of reopening. Tehran contradicted this. The price reversed course, settling around $110 by mid-May – more than 50 percent above pre-war levels. The International Energy Agency documents in its Oil Market Report of May 13, 2026, which underlies this analysis, an average daily trading range for Brent futures of $4.60 per barrel – a level the market last saw in March 2022 following Russia’s invasion of Ukraine.

Volatility of this magnitude is not a side effect of the crisis. It is its signature. It shows a market that has not yet found a new equilibrium, because the structural prerequisites of its old equilibrium are shifting.

Ten weeks after the start of the war in the Middle East, the closure of the Strait of Hormuz has shaken global oil supply to a degree that exceeds even the most pessimistic scenarios of energy planners. Gulf state supply is down 14.4 million barrels per day from pre-war levels, according to IEA data. The global net shortfall is 12.8 million barrels per day – the difference is already being filled today by new suppliers outside the Gulf region. It is precisely in this difference that the core of this analysis lies.

While India is rationing LPG cylinders, Japanese refineries are switching to emergency operations, and Korea has partially shut down its petrochemical industry, the United States is pumping at record levels. For the first time in more than 50 years, the US was a net crude oil exporter in a single week in April. Brazil’s output is hitting all-time highs. Venezuela – still under maximum US sanctions just a few months ago – is delivering again. And the United Arab Emirates have left OPEC after nearly 60 years of membership.

This is not chaos. It is redistribution. The question the IEA report raises without explicitly stating it is: does this crisis follow a political logic? And if so, who wrote it?

The Numbers That Matter

The IEA report is not an opinion document. It is data – precise, methodologically sound, and politically neutral in its formulation. That is precisely why it is revealing when read against the grain.

Global oil demand will shrink by 420,000 barrels per day year-on-year in 2026, to 104 million barrels per day. That is 1.3 million barrels less than the IEA had projected before the war began. The largest drop comes in the second quarter of 2026 – minus 2.45 million barrels per day year-on-year. Petrochemicals and aviation are the hardest hit.

On the supply side, the picture is more drastic. Global oil supply fell in April to 95.1 million barrels per day – a further decline of 1.8 million barrels from March. OPEC production stands at its lowest level in more than 35 years.

Inventories are shrinking at a pace the IEA describes as “record.” Global oil stocks fell by 129 million barrels in March and a further 117 million barrels in April. Land-based stocks fell in April by 170 million barrels – equivalent to 5.7 million barrels per day. OECD countries have coordinately released 400 million barrels from strategic reserves, which reduces the cumulative deficit on paper without closing it. Even in the IEA’s base scenario – reopening of the Strait of Hormuz from June 2026, gradual normalization from the third quarter – the market remains in deficit until October 2026. By September 2026, the cumulative deficit will have grown to 900 million barrels. Refilling strategic reserves, the IEA notes, requires an additional supply of one million barrels per day over three years – on top of demand growth.

What often goes missing in the headlines is the second bottleneck: the refineries. Global refinery throughput is crashing in the second quarter by 4.5 million barrels per day – to 78.7 million barrels per day, the lowest level in years. This shifts the crisis downstream in the value chain: even if crude oil were available tomorrow, the world cannot process it at the pace end markets require. The consequences are visible in product prices. Jet fuel and diesel cracks – the spread between product price and crude that indicates refinery profitability – reached $75 and $60 per barrel respectively in April. That is three times the February average. ARA jet inventories in Europe – the Amsterdam-Rotterdam-Antwerp hub through which traditionally a large share of European jet supply flows – have fallen to a five-year low, 12 percent below the previous nadir of the time series.

These figures are the frame. What happens inside them is the actual story.

The Atlantic Basin Rotation

Anyone who wants to read only one thing in the IEA report should turn to the trade flow map. It shows what has been happening in the fine print of the oil economy since March 2026: global supply is pivoting from east to west. What previously flowed from the Persian Gulf to Asia is now coming from the Atlantic basin. The United States, Brazil, Canada, Venezuela – and in a limited capacity Russia – together account for 3.5 million barrels per day of Atlantic basin additional exports relative to February. This is not a market reaction. It is a structural shift whose infrastructure was built up over years.

US total oil production reached a new all-time high of 21.9 million barrels per day in April 2026, driven by a crude oil record of 14 million barrels per day. US crude exports rose in April to 5.2 million barrels per day – also a record – and reached in a single week toward month-end 6.44 million barrels per day, the highest figure since records began in 1991. With crude imports of 5.75 million barrels per day, the US was a net crude oil exporter in that week for the first time in more than 50 years.

This was no improvisation. The Trump administration has systematically dismantled production constraints since taking office. The Environmental Protection Agency loosened its guidelines on gas flaring in the Permian Basin – the central associated gas curtailment issue that has limited shale oil production for years. When associated gas cannot be flared and pipelines are full, oil drilling must be throttled. With the loosened regulation, that constraint falls. In parallel, almost 800,000 barrels per day of new LPG export capacity is coming online in 2026 – docking capacity for liquefied gas that previously could not reach the world market for lack of shipping routes.

The strategic consequence is more explicit than market dynamics. The United States is taking over the position the Persian Gulf held for decades: world supplier of crude oil and refined products. On jet fuel, the picture is sharp: the Middle East was the world’s largest net exporter in 2025 at 400,000 barrels per day. In April 2026, it was delivering 70,000. The US and Nigeria – whose Dangote refinery is ramping up at the right moment – are filling the gap. US jet exports to Europe rose by nearly 120,000 barrels per day; West Africa delivered 145,000 barrels per day, more than twice the previous quarter’s volume.

On LPG, the picture is even more extreme. The Gulf states sent nearly 1.5 million barrels per day of LPG through the Strait of Hormuz in 2025 – primarily to Asia. In April 2026, that was down to 270,000 barrels. The United States has increased its LPG exports by 450,000 barrels per day, or 20 percent, and is now delivering 2.7 million barrels per day – equivalent to 69 percent of total global LPG seaborne trade. This is made possible by the shale gas boom of the past decade. The capacity was there. It was waiting for its moment.

Brazil fits into this picture. In April, output reached a third consecutive record high at 4.4 million barrels per day. Petrobras’ new FPSO vessel Búzios 8 – a floating production, storage, and offloading unit for deepwater operations – began operations on May 1, five months ahead of schedule. Eight new FPSOs with a combined capacity of 1.5 million barrels per day have come online since 2024. Brazil is an energy exporter, the real is the world’s best-performing currency this year, and the Brazilian central bank is cautiously cutting interest rates – while the rest of the world wrestles with stagflation concerns. Unlike the United States, Brazil does not need a Hormuz transit for its Atlantic route to Asia. Geography makes the argument.

Canada is also exporting more. The Trans Mountain Pipeline to the Canadian West Coast – the only major bypass project of recent years that ships Canadian heavy oil directly to Asia – reached 830,000 barrels per day in April, with preliminary figures of 860,000 in May. That is 200,000 barrels per day more than February, with China and Korea as the primary destinations.

And then there is Venezuela. Just a few years ago under maximum US sanctions, essentially cut off from the world market. In April 2026, Venezuelan crude exports reached 1.12 million barrels per day – the highest level since the first quarter of 2019. The chronology is the real story. On April 13, Chevron raised its stake in Petroindependencia from 35.8 to 49 percent. On April 16, Repsol assumed operational control of the Petroquiriquire oil field with plans to increase production by 50 percent within 12 months. On April 28, Eni began lifting crude oil from Venezuela in exchange for gas production. Simultaneously, oilfield service companies began mobilizing drilling equipment from storage in eastern Venezuela and on Lake Maracaibo.

This all happened within two weeks – coordinated, structured, immediately after the Gulf escalation. Washington did not unblock Venezuela for humanitarian reasons. Washington activated a supply alternative. The annual forecast for Venezuelan oil supply was revised upward by 70,000 barrels per day in the current IEA report. That sounds modest. It is a signal.

Who Pays the Price

On the other side of the ledger stand Asia’s economies – above all China, Japan, Korea, and India.

China has reduced its crude oil imports from February to April by 3.6 million barrels per day – to 7.9 million barrels per day. That is the largest import decline by a single country recorded in the report. Naphtha imports have collapsed; the petrochemical industry is running on minimum. Gasoline prices were at 9.56 yuan per liter in mid-April – roughly 30 percent above pre-war levels and thus near the 2022 all-time high. The Chinese government has introduced price controls, which dampens demand destruction while simultaneously destroying refinery margins and generating massive state subsidy costs.

Here the structural vulnerability that has challenged Beijing’s industrial policy for years becomes visible. China’s petrochemical sector is an industrial-policy Achilles heel: globally competitive, employing millions, export-oriented – and fundamentally dependent on naphtha and LPG imports from the Gulf. When these imports fall away, the steam crackers run at minimum. That hits not only margins but the entire downstream value chain of plastics, fibers, and intermediate products – and thereby sectors such as construction, agriculture, and manufacturing that are central to Beijing’s economic model.

China’s economy had started 2026 strongly – first quarter up 5 percent year-on-year. Since then the warning signs have multiplied: housing prices continue to fall, in the fifth consecutive year, down 3.4 percent in March. Retail sales grew only 1.7 percent in March, well below forecast. Car sales collapsed 15 percent in March, electric vehicles minus 14.4 percent. And this against the backdrop of an oil shock whose full impact has not yet arrived in the economic data.

Japan has reduced its crude oil imports from February to April by 1.9 million barrels per day. Naphtha demand collapsed by 25 percent year-on-year. The government has released obligatory stocks and mobilized state reserves, and still Japan’s oil inventories are falling to their lowest level since July 2022. Japan’s industry statistics body has suspended weekly reporting of product inventory levels since the war began. Korea – the world’s second-largest naphtha consumer – recorded a demand decline of over 8 percent in March, broad-based across all product categories. Petrochemicals, Korea’s industrial backbone, are under massive pressure.

India faces a specific problem: LPG. India’s April LPG deliveries were more than 40 percent below January–February levels, despite rising US exports. This is a function of geography – ports near Hormuz, alternative deliveries take over four weeks. LPG in India is primarily cooking gas for households. There are queues at filling stations. Rationing so far is confined to commercial users – but the pressure is growing. At the same time, the weak rupee is eroding purchasing power for international crude purchases, and foreign investors have pulled nearly $20 billion out of Indian equities in the first four months of 2026 – already exceeding the record outflow of the entire previous year.

Pakistan, the Philippines, and Sri Lanka have introduced four-day work weeks – a reminder of the 2022 energy crisis, when these same countries slid into balance-of-payments and debt crises. Pakistan, Sri Lanka, and Egypt fell into full balance-of-payments crises in 2022 and all three remain under IMF oversight today. The IMF has now officially declared its reference scenario of a short conflict “no longer relevant.”

Yet one difference from 2022 dampens the crisis risk. Food prices are not rising in parallel this time – the FAO Food Price Index is only 5 percent above the prior year and 20 percent below the 2022 peaks. And the extreme dollar strength of 2022, which then amplified pressure on emerging market currencies, is absent: the dollar index is near pre-war levels. This does not eliminate the crisis risk. It only slows the onset.

Russia – The Silent Beneficiary

Russia appears in the IEA report in a manner that receives little mention in Western reporting: as a silent beneficiary.

Russian crude exports rose in April to 4.9 million barrels per day – an increase of 250,000 barrels from March, despite continued Ukrainian strikes on refineries and ports. The reason is paradoxical: precisely the attacks on Russian refineries have reduced domestic consumption, thereby freeing up more crude for export. Russian export revenues rose in April to $19.2 billion – $6.28 billion more than in April 2025.

The list of affected refineries is concrete. Tuapse at 240,000 barrels per day – the main Black Sea export port for diesel – was struck multiple times. The plants at Perm at 290,000, Yaroslavl at 360,000, and Kirishi at 350,000 barrels per day had to be partially shut down. Kirishi and Yaroslavl are the most important diesel exporters via the Baltic ports. Damage to port infrastructure at Ust-Luga and Primorsk further delayed exports. Total revenues rose nonetheless.

On the pipeline side, adaptation is visible. The Druzhba Pipeline – the world’s largest oil pipeline, through which Russian crude traditionally flows to Central Europe and for which Hungary and Slovakia hold exemptions despite EU sanctions – partially resumed operations in the last week of April: 60,000 barrels per day to Hungary and Slovakia. On the maritime trade side, a new market opened up for Russia: Egypt. Via the Ain Sukhna terminal at the entrance to the Sumed Pipeline – the main connection between the Red Sea and the Mediterranean – Saudi flows rose 36 percent. Russian Urals oil followed: 200,000 barrels per day in April, with a peak of 380,000 barrels in a single week.

Decisive was the change in the price picture. Urals crude has narrowed its discount to North Sea Dated from $28 per barrel in March to $23.94 in April. In other words: Russia received more for every barrel sold, because the world was short.

Here the double-layered nature of the Western sanctions architecture becomes visible. The EU passed its 20th sanctions package in April, placing ports, vessels, and Indonesia’s Karimun oil transshipment terminal – known as a sanctions-evasion hub – on the prohibited list. At the same time, Washington granted temporary sanctions relief for Russian oil at sea – a tactical decision to dampen market panic that de facto increases Russian export revenues. Sanctions that formally remain in place but are factually opened when the market demands it. That is not accidental inconsistency. That is hierarchy.

The UAE Leaves OPEC

On April 28, 2026, the United Arab Emirates left OPEC. After nearly 60 years of membership. The announcement came as a surprise – though on closer inspection it should not have.

The UAE had already been OPEC’s most problematic member before the war. In 2025, they produced an average of 300,000 barrels per day above their OPEC+ quota, despite a quota increase of 300,000 barrels as well. The reason is structural: Abu Dhabi has invested massively in capacity expansion – ADNOC is pursuing a target of 5 million barrels per day by 2027, and has built the infrastructure to get there. An OPEC membership that imposes production constraints stands in direct opposition to this investment logic.

On May 4, Energy Minister Suhail Al Mazrouei explained the exit with the words that the UAE owed it to its investors to produce without quota restrictions. It is a statement of consequence: it signals that Abu Dhabi subordinates OPEC solidarity to capital interests. It is not a criticism – it is a statement about changed priorities.

Structurally, the UAE exit is significant for three reasons.

First: the UAE have, with the Habshan-Fujairah Pipeline, one of the few functioning Hormuz bypass routes. Crude from Abu Dhabi can be transported directly via this pipeline to the port of Fujairah on the Indian Ocean without passing through the Strait of Hormuz. In April, oil exports from Fujairah rose to 2.3 million barrels per day – a capacity ceiling ADNOC is further expanding. On May 3, ADNOC announced an investment package of 200 billion dirhams – roughly $55 billion – to advance its capital build program and strengthen the domestic supply chain. This is not crisis management. It is strategic positioning.

Second – and this is a point that often goes missing in Western reporting: the faster recovery of the UAE and Saudi Arabia relative to Kuwait and Iraq has an industrial-policy explanation. Saudi Arabia, through its In-Kingdom Total Value Add program – IKTVA – has raised the local value content of oilfield equipment to 70 percent. This encompasses drill pipes, wellheads, electrical components, and large domestic fabrication facilities. The UAE have built an integrated domestic provider through ADNOC Drilling. Both countries can draw on domestic production capacity and repair yards when it comes to resuming output after the war ends. Kuwait and Iraq, by contrast, are dependent on imported equipment, foreign EPC capacity, and international service companies – whose expatriate staff were largely evacuated at the start of the war. That translates to weeks or months of additional recovery time. OPEC has bet on solidarity for years. But solidarity does not protect against industrial structural differences when the infrastructure is burning.

Third, the UAE exit opens a question that gets lost in current crisis reporting. With the UAE’s departure, OPEC shrinks to seven core members: Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. This group decided on May 3 to lift further production constraints of 188,000 barrels per day in June – theoretically, as long as the Strait of Hormuz remains closed. It is a signal toward normalization, but also an acknowledgment that OPEC+ has lost its market power for as long as the Gulf transit routes are blocked. If a founding member exits because quota constraints threaten its investment returns, what prevents other members with similar capacity targets from doing the same? This question concerns Iraq and Saudi Arabia themselves over the medium term, once the Hormuz crisis ends and the price falls. Those who want to secure market share at that point will produce – and quotas will become fiction.

The Political Logic

At this point the analysis leaves the terrain of pure market observation. The IEA report documents a series of developments that are individually each explicable – market adjustment, price elasticity, supply substitution. In their totality they produce a coherent picture: the Hormuz crisis is accelerating a power shift in the global energy system that was already underway before the war.

Trump has pursued “Drill, baby, drill” as an economic program since taking office – loosening environmental regulations, accelerating permitting processes, expanding LNG and LPG export capacity. The US production capacity that is now partially compensating for the Hormuz shortfall was built up over recent years. It was ready.

At the same time, Washington has implemented a sanctions architecture that is surprising to many and only becomes legible in context. From April 13, the US Navy erected a naval blockade against Iran – not an embargo through tanker marking but physical control of vessels approaching Iranian ports. Iranian crude exports through the strait subsequently fell by 1.1 million barrels per day to 530,000 barrels in April. Simultaneously, in the same month, Washington granted sanctions relief for Russian oil at sea. And simultaneously, Venezuela was activated through the US licensing regime – Chevron, Repsol, Eni all within two weeks.

This is not contradictory chaos. It is hierarchy. Iran is the target – the primary strategic adversary whose revenues are to be choked. Russia is the instrument – temporarily used as a market buffer to prevent an inflationary cascade while the formal sanctions framework remains intact. Venezuela is the replacement source – unblocked because the supply gap must be filled. All three decisions serve the same purpose: securing oil supply without dependence on the Gulf, without China finding alternatives that ease US pressure.

China sits in this constellation with a half-empty tank. China’s dependence on Gulf imports – the IEA documents a decline in Chinese crude imports to 7.9 million barrels per day – is hitting an economy simultaneously fighting a real estate crash, declining consumer spending, and the structural pressure of the trade war. The petrochemical sector, central to China’s industrial policy, is particularly exposed. This is not collateral damage. It is a pressure instrument.

Anyone who considers this an overinterpretation should explain why Venezuela was unblocked precisely at the moment the Gulf failed. Why Brazil – whose oil goes to Asia via Atlantic route and therefore requires no Hormuz transit – became the central replacement supply for East Asian refineries. And why ADNOC announced a $55 billion investment package on May 03, five days after the UAE-OPEC exit. The structural background to this constellation – Trump’s Gulf state strategy, the role of the UAE between Washington and Tehran, the regional reordering after Rubio’s “no regime change” signal – is the subject of the ongoing Follow the Oil series. This article focuses on the numbers that set the frame, and their logic.

Scenarios – The Mine Factor

The IEA works with a base scenario: the Strait of Hormuz gradually opens from June 2026. What even this base scenario overlooks is the geography of the restart.

In late April, the US Department of Defense publicly stated that the number and position of Iranian sea mines is uncertain – and that clearance could take months. At the time of the IEA publication on May 13, no clearance plan had been announced and no country had publicly committed resources. Minesweepers first have to be deployed to the region – that takes weeks. The clearance itself takes further weeks to months. As long as mine clearance is not visibly underway and under international oversight, insurers will not issue standard policies for Hormuz transit – and without insurance, no tankers will sail.

Even after mines are cleared, resumption remains complex. Tankers have to be shepherded out of the Gulf region, ballast tanker flows repositioned, port capacities reset. The IEA estimates two to three months for trade logistics alone. Production capacity follows more slowly. Qatar requires three to five years for repairs to Trains 4 and 6 at Ras Laffan. Kuwait and Iraq need international skilled workers who have not yet returned. Saudi Arabia and the UAE recover more quickly – but even in the optimistic scenario, the market remains in deficit until October 2026.

The prolonged scenario – no deal until year-end – would drive the cumulative deficit to double the base scenario, according to the IEA. That would be 1.8 billion barrels. No strategic reserve in the world offsets that.

The price reaction would be commensurate. In the prolonged scenario, a renewed breach of the $144 threshold is realistic, possibly beyond. That would have consequences for inflation in OECD countries – US consumer prices already rose to 3.3 percent in March – for emerging markets that can no longer finance price controls, and for the global economy overall. The IMF’s reference to now-invalid baseline scenarios is not bureaucratic fine print in this context. It is a warning.

The New Order

The IEA Oil Market Report of May 13, 2026 is a document of extraordinary analytical density. It describes a world in which the physical closure of a 21-mile-wide strait is reordering global energy supply. The distribution of winners and losers is not random.

What becomes visible between the lines: this crisis is not a disruption of the system. It is the acceleration of a shift that had long begun. The United States was on its way to becoming a global energy exporter since the shale gas boom took hold in the mid-2010s. Brazil had been building out its pre-salt deepwater sector for years. The UAE completed Habshan-Fujairah long before 2026. Russia had shifted its customer base to Asia since 2022. What the Hormuz closure does is not create a new world – it forces the old one to show itself.

The UAE have understood this. The OPEC exit on April 28 is the answer of a state that has recognized the old order is not coming back. Abu Dhabi is investing $55 billion in capacity, expanding bypass routes, and positioning itself as a reliable supplier – independent of quotas and cartel solidarity.

The question is no longer whether the oil order is changing. The question is who writes the new one.

First published at tkp.at on May 29, 2026

Michael Hollister
is a geopolitical analyst and investigative journalist. He served six years in the German military, including peacekeeping deployments in the Balkans (SFOR, KFOR), followed by 14 years in IT security management. His analysis draws on primary sources to examine European militarization, Western intervention policy, and shifting power dynamics across Asia. A particular focus of his work lies in Southeast Asia, where he investigates strategic dependencies, spheres of influence, and security architectures. Hollister combines operational insider perspective with uncompromising systemic critique-beyond opinion journalism. His work appears on his bilingual website (German/English) www.michael-hollister.com and in investigative outlets across the German-speaking world and the Anglosphere.

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© Michael Hollister – All rights reserved. Redistribution, publication or reuse of this text requires express written permission from the author. For licensing inquiries, please contact the author via www.michael-hollister.com.

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