Subsequent to the reporting date, geopolitical tensions in the Middle East have intensified following military actions involving the United States and Israel and retaliatory actions by Iran, targeting Isreal, Bahrain, Kuwait, Qatar, the United Arab Emirates, Jordan, Saudi Arabia, Cyprus, and ships passing through the Strait of Hormuz.
Maritime insurers canceled war risk cover in the Gulf, thereby effectively closing the Strait of Hormuz. Usually, about 20% of global oil and natural gas passes through that narrow shipping lane in the Gulf. As a result of uncertainty and disruption to international trade, global oil and natural gas prices substantially increased following the military actions, and further volatility is expected. OMV financial results may be impacted by the inability to fulfill delivery contracts and by volatility in derivative financial instruments. However, the extent and duration of any such effects remain uncertain and dependent on future developments.
OMV Group’s activities in the region are partially affected. The 15 kboe/d natural gas and NGL production in Kurdistan is being stopped (reflecting OMVs investment in Pearl Petroleum Company Limited). OMV further produces 51 kbbl/d of crude oil in the United Arab Emirates and in addition holds a 15% stake in ADNOC Refining (United Arab Emirates). Through its subsidiary Borealis, OMV is a major shareholder of Borouge which provides polymer solutions from its assets in the United Arab Emirates. The Strait of Hormuz is the major export route for UAE export.
Given the rapidly evolving nature of the situation, it is not currently possible to reliably quantify the overall financial impact, whether adverse or favorable, on the financial statements of OMV Group. Accordingly, no adjustments have been made to the financial statements as of the reporting date, as these events are considered non adjusting subsequent events. Management will continue to monitor developments and assess potential implications for operations, financial position, and performance.