Mounting operating losses that could prompt major oil companies to pressure Trump to stop the war.
Afrasianet - Yahya Al Sadeq - It is not only global oil prices that are pressuring Trump to stop his war on Iran, as the cost of this war on foreign investment in the Gulf energy sector has also become a source of serious concern for everyone, including governments and companies, especially as this cost continues to be on an upward trend, even as military strikes stop from time to time.
As long as the option of returning to war is available at any moment, as happened with Washington's violation of the memorandum of understanding in July, The level of risk remains very high, which prevents any comprehensive repairs to the damage, increased production rates, or new investments.
Although there are currently no accurate estimates, or even preliminary estimates, of the value of the losses suffered by these investments, all indicators and data indicate that there are direct and indirect losses that are not transient, not least the decrease in the investment return achieved from foreign assets and investments, estimated at about $300 billion, due to the interruption or reduction of production, or the exposure of some strategic facilities to direct military targeting.
Although the increase in oil and gas prices during the same period compensated for some of these losses, the Its percentage will not be accurately determined until companies make accurate cost calculations.
In this context, some international reports suggest, for example, that ExxonMobil's losses due to damage to the gas facilities in Qatar's Ras Laffan complex could reach $5 billion in annual revenues.
Shell has also halted production entirely in Qatar due to the closure of the Pearl facility, and the disruption of navigation in the Strait of Hormuz. Chatham House explicitly warned that targeting major facilities would lead to much greater losses, not only for the producing countries, but also for foreign companies operating in them.
Non-transient operating losses
It is true that the infrastructure of state-owned oil and gas facilities has been the most damaged, and it is estimated that $60 billion in financing is needed to repair these damages and rehabilitate the facilities, but this does not diminish the importance of the operational losses incurred by foreign oil companies.
In addition to the suspension of production and exports, which usually result in a significant decline in revenues, the postponement of new investments, and the suspension of maintenance and replacement work, these investments, in all their fields, have come under pressure Several variables have contributed to the inflation of operating costs, including, for example, the increase in the value of marine insurance and energy insurance premiums, and the increase in the cost of maritime transportation, especially in the case of resorting to alternative routes to the Strait of Hormuz, and others.
It is worth mentioning here that the increase in oil and gas prices globally has not benefited foreign companies operating in the Gulf, as is the case in the rest of the other oil and gas exporting countries, for two reasons: the first is the limited quantities that these companies were able to export in light of the closure of the Strait of Hormuz or the direct targeting of ships.
The second reason is the high cost of producing, exporting and operating Gulf oil and gas, for the reasons mentioned above. The cost of this production was also high, which minimized the positive impact of higher oil and gas prices on the revenues of both companies and governments.
So far, it is estimated that the restoration of the Gulf states' previous exports to the pre-war period will require a period of time between three and five years, and may extend even further if the United States and Israel target key energy facilities and infrastructure.
The Iranian response, according to the previous scenario and the statements of officials in Tehran, would then be to target all energy facilities in the Gulf and the region, specifically those invested in them, partially or wholly, by American companies.
The world in general, and foreign investments in the Gulf energy sector, are facing a shock whose effects will not be erased until decades later.
New Investment Bet!
But what prevents Trump from carrying out his threats and targeting Iranian oil facilities is that American oil companies are still trying to expand their share of oil investments in the region, even if only through preliminary memorandums of understanding such as the one it signed recently with Iraq, which exceeded $60 billion, with Syria to rehabilitate and operate the Kirkuk-Baniyas pipeline, and other deals in Qatar, Saudi Arabia, the United Arab Emirates, and Oman.
However, the past months have proven that Trump's decisions are not subject to logic and do not take into account the supreme interests of the United States, but are based on two basic considerations: the first is the self-logic that expresses the interests and investments of Trump, his family, and his administration, which are expanding in several countries due to his pressures and policies, as happened in Venezuela, Syria, and others.
The second consideration is the Israeli pressures and interests that led Trump to launch a war on Iran that harmed the interests of the entire world.
The Netanyahu government is pressuring the Trump administration to expand the circle of war, regardless of its consequences for the region and the world.
Although Trump appears to be imposing his will on Netanyahu, the reality proves otherwise. For example, when Trump asked for the withdrawal of Israeli troops from Lebanon and Syria, Netanyahu refused to do so.
In short, to the extent that the major oil companies can put pressure on Trump to stop this destructive war for the world economy, they can reduce the bill of their operational losses in the Gulf, which is piling up day by day, and also reduce the time needed to overcome and compensate for these losses, enter into new investments, and implement the memorandums of understanding they recently signed with several countries. If the war expands, its negative effects will not remain in its usual framework, but will include the Middle East and the entire world.
________________
