LONDON(National Times)- The war in the Middle East is creating the biggest oil supply disruption in the history of the global market, the International Energy Agency said on Thursday, a day after the agency agreed to release a record volume of oil from strategic stockpiles. Middle East Gulf countries have cut total oil production by at least 10 million bpd – a volume equal to almost 10% of world demand – as a result of the conflict, the agency said in its latest monthly oil market report. Without a rapid restart of shipping flows, these losses are set to increase, IEA said.
‘Oil reserve release had strong impact on markets’
The IEA’s decision to release 400 million barrels of oil from global strategic reserves has already had a “strong impact” on energy markets, which are in an “extremely critical period” after the closure of the Strait of Hormuz, its Executive Director Fatih Birol said on Thursday. The IEA’s coordinated move in the face of the Iran war was aimed to stabilise oil markets, Birol said at an Istanbul press conference. He declined to respond to a question on the daily pace of release from stockpiles. The IEA, made up of major oil consuming nations, on Wednesday recommended releasing 400 million barrels from global strategic reserves to dampen one of the worst oil shocks since the 1970s, the biggest such intervention in history. The proposed release is larger than the 182 million barrels of oil that IEA member countries released in 2022 after Russia launched its full-scale invasion of Ukraine. “We are already seeing a strong impact from this move,” Birol said, calling the IEA decision “an extremely significant development”. “Global energy markets are going through an extremely critical period due to developments in the Middle East. In particular, the closure of the Strait of Hormuz has caused serious disruptions in global oil and natural gas markets,” he said, adding the decision was made in response to this. US President Donald Trump said the IEA decision will “substantially” reduce oil prices amid the US-Israel war with Iran, while Tehran warned that oil could reach $200 a barrel after striking tankers in Iraqi waters and other ships near the vital Strait of Hormuz.
