FEATURE | Hormuz closure brings windfalls to some oil states as others lose

Iraq has suffered the biggest drop

The UAE has been shielded to an extent by its 1.5-1.8 million bpd Habshan-Fujairah pipeline, which bypasses the strait. Its estimated oil export value still fell by more than $174 million year-on-year in March. Fujairah has come under a series of attacks that led to loading halts.

Among the gulf producers, Iraq's revenue fell the most - plunging by 76 per cent to $1.73 billion. Kuwait was next with a 73 per cent fall to $864 million. Iraq's state oil marketer SOMO said on April 2 that March oil revenues were about $2 billion, close to Reuters' estimate.

Both countries are likely to suffer steeper declines in April as their March revenues were improved by cargoes that managed to sail in the early days of the conflict. A tanker laden with Iraqi crude sailed through the strait last week after Iran said Iraq would be exempt from restrictions.

Adriana Alvarado, VP of sovereign ratings at Morningstar DBRS, said gulf governments had options to shore up their finances and could either draw on fiscal savings or go to the financial markets to issue debt. "Apart from Bahrain, the gulf states have enough fiscal room to deal with the shock, with government debt at moderate levels below 45 per cent of GDP," she added.

For the longer term, however, the impact is unclear. Some oil companies and politicians in the west have lobbied for increased investment in fossil fuels to try to protect against supply shocks, but some analysts say renewable energy provides the best protection.

In an early indicator of how the crisis could accelerate a shift from reliance on oil, last week France's TotalEnergies and UAE state-backed renewable energy firm Masdar announced a $2.2 billion joint venture to rapidly deploy renewable energy across nine Asian countries.

(Reporting by Ahmad Ghaddar in London and Yousef Saba; Additional reporting by Seher Dareen in London; Editing by Barbara Lewis)