Mishustin: Middle East events have disrupted logistics of global energy sector; investment, time required for restoration

MOSCOW. April 7 (Interfax) - The conflict in the Middle East has led to the disruption of traditional sea routes that ensure the logistics of oil and gas supplies, and their restoration will require significant investment and time, Russian Prime Minister Mikhail Mishustin said.

"One of the most important international transport corridors in the Persian Gulf has been effectively paralyzed. As a result, about 10% of global liquid hydrocarbon production has been taken off the market at once. It will, of course, take considerable time and considerable investment to restore processes, infrastructure, and the transportation of goods. This has already affected prices," Mishustin said when opening a strategic session on the development of the fuel and energy sector.

The rise in quotations of gas and oil contracts (both in Europe and Asia) has led to significant imbalances in global energy trade, Mishustin said. This may be followed by an increased burden on related industries and manufacturing, which will provoke inflationary pressure, he said.

"The consequences extend far beyond the international fuel and energy sector alone. According to some estimates, about 40% of global exports of carbamide, an important fertilizer, have already been halted: prices in certain markets have increased more than one and a half times. Also, the conflict region accounts for up to half of global sulfur supplies. Sulfur is used in metallurgy, the battery and electronics industries, as is helium, the global supply of which has decreased by almost a third. And that includes medical tomographs, semiconductor production, artificial intelligence systems, and advanced scientific research," Mishustin said.

He also noted a reduction in the supply of naphtha and liquefied petroleum gases from Arab countries, which could affect the plastics market and, consequently, consumer goods that use these materials.

As reported, amid the Middle East conflict that began in late February, a number of OPEC+ countries, including Saudi Arabia, Iraq, Kuwait and the UAE, have had to reduce production. Representatives of the countries have not disclosed exact amounts; analysts estimate the total decline in production in these countries at 7 million to 10 million barrels per day.