PARIS: The head of the International Energy Agency (IEA), Fatih Birol, has warned that global commercial oil inventories are depleting at a rapid pace, leaving only “a few weeks’ supply” amid disruptions triggered by the Iran conflict and heightened geopolitical tensions.
Speaking on Monday during the Group of Seven (G7) finance leaders’ meeting in Paris, Birol said that while strategic petroleum reserve releases had temporarily added around 2.5 million barrels per day to global supply, such reserves are not sustainable in the long term.
He noted that seasonal demand from the spring planting and upcoming summer travel period in the northern hemisphere would further accelerate inventory drawdowns, driven by rising consumption of diesel, jet fuel, gasoline and fertiliser-linked energy demand.
Birol described a growing disconnect between physical oil markets and financial market expectations, warning that perceptions of supply stability do not reflect tightening real-world inventories.
He said that before the escalation of the US-Israel strikes on Iran in late February, global oil markets were in surplus with relatively high stock levels. However, the situation has shifted sharply due to the conflict and associated disruptions.
According to him, commercial inventories would last only “several weeks” under current conditions and are declining at a fast pace.
The IEA has previously reported that global observed oil inventories fell at a record rate in March and April, dropping by 246 million barrels. The agency also said the release of strategic reserves—totalling 400 million barrels in coordinated efforts—has helped stabilize markets, with around 164 million barrels already released by early May.
In its latest outlook, the IEA revised its earlier projections, now estimating that global oil supply could fall by around 3.9 million barrels per day in 2026 due to the ongoing conflict, compared to a previously forecast decline of 1.5 million barrels per day.
By Reuters
