PARIS: International Energy Agency chief Fatih Birol on Monday indicated that additional strategic oil reserves could be released if needed to stabilise global markets amid severe supply disruptions caused by the ongoing conflict affecting the Strait of Hormuz.
In a video statement, Birol said that combined government and industry-held emergency reserves still exceed 1.4 billion barrels, providing room for further intervention if the situation worsens. However, he cautioned that such releases can only serve as a temporary buffer against the sharp supply shock.
“The most critical factor for restoring stability is the resumption of oil and gas transit through the Strait of Hormuz,” he stressed, adding that strategic stock releases are not a long-term solution to the crisis.
In its latest monthly report, the IEA described the ongoing conflict — triggered by military action from the United States and Israel on February 28 — as potentially the largest supply disruption in the history of global oil markets. The agency estimates that crude production has already fallen by at least 8 million barrels per day.
The situation has been exacerbated by Iran’s effective blockade of the Strait of Hormuz, through which roughly one-fifth of the world’s crude oil supply normally passes. Current flows have dropped to less than 10 per cent of pre-crisis levels, which stood at around 15 million barrels per day in 2025. The IEA noted there are no clear signs of de-escalation or a timeline for the restoration of normal shipping activity.
Oil prices, which hovered near $60 per barrel before the conflict, surged to nearly double that level before easing back to around $100 following the IEA’s record release of 400 million barrels from strategic reserves on March 11. Birol said the move had a “calming effect” on markets, though significant volatility persists.
He also highlighted that several countries — including Colombia, India, Singapore, Thailand, and Vietnam — are prepared to support further coordinated releases if required.
Meanwhile, crude prices showed signs of easing after reports that a Pakistani oil tanker successfully transited the Strait of Hormuz with its tracking system active — the first such passage by a non-Iranian vessel since the crisis escalated.
Following the development, US benchmark West Texas Intermediate fell by more than five per cent to $93.37 per barrel, while international benchmark Brent crude declined by 2.77 per cent to $100.28.
Despite the temporary relief, global energy markets remain under strain, with supply uncertainties and geopolitical tensions continuing to pose significant risks.
By AFP
