World faces largest-ever oil disruption on Mideast war
War in the Middle East has led to the biggest oil supply disruption in history, the International Energy Agency said, a day after it agreed to release record amounts from strategic stockpiles to offset shortages and a rise in prices.
The IEA said in its latest monthly oil market report that global supply is expected to fall by eight million barrels per day in March due to the closure of the Strait of Hormuz, a narrow channel along Iran’s coast since the United States and Israel launched an airstrike campaign on Iran on February 28.
Middle Eastern Gulf countries, including Iraq, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia, have reduced total oil production by at least 10 million barrels per day (a volume equal to almost 10 percent of world demand) as a result of the conflict, the IEA said.
These losses will increase unless shipping flows resume quickly, the agency added.
“It will take weeks, and in some cases months, for shut down production to return to pre-crisis levels, depending on the degree of complexity of the site and the timing of the return of workers, equipment and resources to the site,” the organization said in a statement Thursday. he said.
The IEA, which advises industrialized countries, agreed on Wednesday to release a record 400 million barrels of oil from strategic stockpiles held by member countries to combat a rise in global crude prices since the beginning of the US-Israeli war against Iran.
Oil prices rose on Thursday as Iran stepped up attacks on oil and transportation facilities in the Middle East, raising fears of a protracted conflict and continued disruptions to oil flows in the Strait of Hormuz.
Brent crude oil, which hit $119.50 per barrel on Monday, its highest level since mid-2022, rose more than 6 percent to just under $98 per barrel on Thursday.
