IEA Members Release 290 Million Barrels of Oil Since March

The IEA said member countries have released 290 million barrels of emergency oil stocks since March 11, while retaining more than 1 billion barrels in government-controlled reserves to help stabilize global markets.

(P&GJ) — The International Energy Agency (IEA) warned that disruptions affecting the Strait of Hormuz continue to tighten global LNG markets, even as increased exports from the United States and Canada have offset much of the lost supply from the Gulf.

The agency said escalating hostilities affecting the Strait of Hormuz and regional energy infrastructure have increased uncertainty over global oil and natural gas supplies. It also cited growing concerns about threats to the Bab el-Mandeb Strait, an increasingly important shipping route used to bypass Hormuz.

Despite the disruptions, the IEA said global crude markets continue to receive support from higher production and exports from Saudi Arabia and the United Arab Emirates, along with increased shipments from the United States, Brazil, Venezuela and Kazakhstan.

The agency also noted that China has reduced crude oil imports by nearly 50% compared with pre-conflict levels, helping ease pressure on global oil demand.

For natural gas markets, the IEA estimated that additional LNG shipments from the United States and Canada have replaced about 70% of the Gulf LNG supply lost because of disruptions in the Strait of Hormuz.

"Further delays in resuming Gulf exports risk keeping markets tighter for longer."

The agency said tighter LNG supplies could affect importers worldwide, including Europe as it works to replenish natural gas storage ahead of winter.

The IEA added that emergency oil stock releases by member countries continue to help stabilize crude markets. Since announcing a coordinated release in March, member countries have supplied about 290 million barrels from strategic reserves, while retaining more than 1 billion barrels in government-controlled emergency stocks.

While crude markets remain relatively well supplied, the agency cautioned that refined fuel markets are considerably tighter because refinery activity has not recovered as quickly as crude deliveries.

The IEA said a full reopening of the Strait of Hormuz remains essential to restoring stability to global energy markets.