The world is drawing on oil reserves at record rates, the International Energy Agency warns, as the war in the Middle East continues to restrict supplies from the Gulf region.
“More than ten weeks after the start of the war in the Middle East, mounting supply losses in the Sea of Hormuz are depleting global oil reserves at a record pace,” the International Energy Agency says in its monthly report on oil markets.
Global inventories have fallen by 250 million barrels in March and April, a rate of 4 million barrels per day, according to the IEA. “The rapid decline in inventories within a context of sustained turmoil likely heralds price ignition in the future,” it noted.
Specifically, global oil supply fell further by 1.8 million barrels per day in April to reach 95.1 million b/d, bringing the total losses since February to 12.8 million b/d.
Based on the scenario of a gradual resumption of flow through the Strait of Hormuz from June, global oil supply is expected to fall by an average of 3.9 million b/d, the global oil supply is expected to fall by an average of 3.9 million b/d.b/d in 2026 to reach 102.25 million b/d.
This translates into a loss of 5.9% compared with pre-war estimates (108.6 million b/d), according to the February report, the International Energy Agency told AFP.
Global oil demand is expected to fall by 420,000 b/d in annualized terms for 2026 to reach 104 million b/d, down 1.3 million b/d from pre-war projections.
The International Energy Agency estimates that if demand can return to an upward trajectory towards the end of the year under the assumption that a peace agreement can be reached, supply is expected to recover at a slower pace.
As a consequence, oil markets will remain “surplus until the last quarter of the year, the Energy Agency OECD believes, warning that “a further destabilisation of prices seems likely as the peak summer demand period approaches.”
