PARIS, March 12 (Xinhua) — The global oil market is facing the largest supply disruption in its history as conflict in the Middle East severely disrupts energy flows through the region, the International Energy Agency (IEA) said on Thursday.
According to the latest Oil Market Report released by the IEA, crude and oil product flows through the Strait of Hormuz — one of the world’s most critical oil transit chokepoints — have plunged from around 20 million barrels per day (mb/d) before the war to only a small fraction currently, forcing Gulf producers to cut oil output by at least 10 mb/d.
As a result, global oil supply is expected to drop by about 8 mb/d in March, with curtailments in the Middle East partly offset by higher production from non-OPEC+ producers, Kazakhstan and Russia, following disruptions earlier this year, the report said.
Attacks and limited export outlets have forced the shutdown of more than 3 mb/d of refining capacity in the region, it noted.
Oil prices have fluctuated sharply since the United States and Israel launched joint airstrikes on Iran on Feb. 28. Benchmark Brent crude futures briefly approached 120 U.S. dollars per barrel before easing to above 90 dollars, still roughly 20 dollars higher than a month earlier.
In response to the supply disruption, IEA member countries agreed on Wednesday to release an unprecedented 400 million barrels of oil from their emergency reserves to the market.
The ultimate impact of the conflict on oil and gas markets and the broader economy will depend not only on the intensity of military attacks and potential damage to energy assets, but also, crucially, on the duration of disruptions to shipping through the Strait of Hormuz, the IEA warned.
