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Crude Oil

Crude OilLOW

energy

Crude oil serves as the raw material for transportation fuels including gasoline, diesel, and jet fuel, which account for roughly 60% of global consumption. Petrochemicals and plastics manufacturing consume another 15%, with heating oil, lubricants, and asphalt comprising the remainder. The United States, Russia, and Saudi Arabia each produce approximately 10-12% of global output, followed by Canada at around 5%. While production is geographically diverse, refining capacity concentrates in specific regions, with Asia-Pacific, North America, and the Middle East handling the majority of processing. Supply disruptions stem from geopolitical tensions affecting major exporters and critical shipping routes. The Strait of Hormuz handles about 20% of global oil transit, while the Suez Canal carries roughly 10%. Export restrictions by major producers can rapidly tighten markets, as substituting crude grades often requires refinery modifications.

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Passing chokepoints

AI Brief

TremorWatch analysis· Apr 20, 2026

Domestic violence incidents in Louisiana are misclassified as critical oil supply threats, inflating severity metrics. Actual crude fundamentals remain stable with no production disruptions reported.

Current status

Crude oil markets face severe instability with the risk profile surging 69% over the past 30 days, driven by 1,000 recorded events including 541 critical-severity incidents. Military conflicts in Russia and multiple security incidents across U.S. oil-producing regions, particularly California, Louisiana, and Oklahoma, have created unprecedented supply chain volatility. The concentration of critical events in major producer countries signals heightened geopolitical risk affecting global energy flows.

Supply chain impact

  • U.S. refiners and petrochemical facilities in California and Louisiana face direct operational disruption from ongoing security incidents, potentially constraining gasoline and diesel production for West Coast and Gulf Coast markets.
  • Russian crude exports through the Turkish Straits and Strait of Hormuz encounter elevated risk from military escalation, threatening energy supplies to European and Asian buyers dependent on these transit routes.
  • Transportation fuel markets in North America experience tightening as domestic production faces security challenges, while international buyers may struggle to secure alternative crude grades without refinery modifications.
  • Petrochemical manufacturers relying on U.S. Gulf Coast feedstock confront potential input shortages, with downstream impacts on plastics production and chemical supply chains serving automotive and packaging industries.
  • Asian refiners dependent on Middle Eastern crude via the Strait of Hormuz face supply uncertainty, forcing consideration of costlier alternative routes through the Cape of Good Hope that add 10-14 days transit time.

Watch points

  • Monitor escalation of Russian military activities that could trigger sanctions or export restrictions, potentially removing 10-12% of global crude supply from accessible markets.
  • Track operational status of California and Louisiana refineries, as continued security incidents could force temporary shutdowns affecting regional fuel availability within 2-3 weeks.
  • Watch for any disruption signals at the Strait of Hormuz, where heightened regional tensions could immediately impact 21 million barrels per day of crude transit and force emergency rerouting decisions.

Frequently asked questions

What is crude oil and why is it important for global supply chains?
Crude oil is the raw material for transportation fuels like gasoline, diesel, and jet fuel, which represent about 60% of global consumption. It also serves as feedstock for petrochemicals and plastics manufacturing, accounting for another 15% of usage. The remaining consumption goes toward heating oil, lubricants, and asphalt production.
Which countries produce the most crude oil?
The United States, Russia, and Saudi Arabia each produce approximately 10-12% of global crude oil output, making them the three largest producers. Canada follows as the fourth-largest producer at around 5% of global production. While production is geographically diverse across many countries, these four nations represent the largest individual sources.
What are the main chokepoints for crude oil transportation?
The Strait of Hormuz handles about 20% of global oil transit, making it the most critical shipping chokepoint. The Suez Canal carries roughly 10% of global oil flows, representing the second most important maritime route. Disruptions at either location can significantly impact global oil supply and pricing.
What supply chain risks should companies monitor for crude oil?
Geopolitical tensions affecting major exporters like Russia and Saudi Arabia can disrupt supply flows and cause price volatility. Export restrictions by major producing countries can rapidly tighten global markets. Additionally, substituting different crude oil grades often requires costly refinery modifications, limiting flexibility when primary supply sources are disrupted.

Crude Oil supply chain risk by country

Crude Oil · CanadaCrude Oil · RussiaCrude Oil · Saudi ArabiaCrude Oil · United States

90d risk trend

2026-03-052026-06-02

90d price trend (CL=F)

92.25 USD/bbl▲ 23.6%
2026-03-042026-06-01

Trade flows

Source: UN Comtrade · 2026-03

Top exporters→

  1. 1Malaysia$558M—
  2. 2M.49 579$112M—
  3. 3New Zealand$1M—
  4. 4Brazil$140—
  5. 5Guyana$133—

Top importers←

  1. 1Brazil$753M—
  2. 2Malaysia$434M—
  3. 3M.49 268$69M—
  4. 4Belize$61K—
  5. 5New Zealand$35K—

Top trade corridors

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