International Energy Agency: The Global Oil Market Faces Its Most Severe Supply Disruption in History

Source: Xinhua News Agency

Beijing, March 12 — The International Energy Agency (IEA) stated in its latest monthly oil market report that, due to ongoing tensions in the Middle East, the global oil market is facing the most severe supply disruptions in history. If shipping cannot be restored promptly, the global crude oil supply gap will widen further.

The report notes that the volume of oil and petroleum product shipments through the Strait of Hormuz has plummeted from an average of about 20 million barrels per day before the U.S.-Israel military strikes on Iran to currently “extremely low levels.” Limited alternative shipping capacity around key routes and near-saturation of storage facilities have led Gulf countries to cut their daily total crude oil production by at least 10 million barrels. The report forecasts that global daily crude oil supply will sharply decline by approximately 8 million barrels in March.

The report states that the military strikes by the U.S. and Israel on Iran have significantly impacted the global refined oil market, with over 3 million barrels of refining capacity in the Middle East halted daily. Due to raw material shortages, refining in other regions will also gradually face restrictions.

The report shows that since the U.S.-Israel attacks on Iran, international oil prices have experienced sharp fluctuations. Brent crude futures in London briefly rose to nearly $120 per barrel. In response, member countries of the IEA unanimously agreed on the 11th to release 400 million barrels from strategic petroleum reserves to ease global supply tensions. Data indicates that global crude oil and refined product inventories reached 8.21 billion barrels in January, the highest level since February 2021.

The report emphasizes that releasing oil reserves is only a temporary measure. The ultimate impact of the U.S.-Israel-Iran conflict on the oil and gas markets and the overall economy depends not only on the intensity of military actions and damage to energy infrastructure but also critically on the duration of shipping disruptions through the Strait of Hormuz.