IEA chief warns that commercial oil stocks are rapidly depleting, with only a few weeks remaining
Fatih Birol of the International Energy Agency said that the commercial oil inventory was depleting quickly - with only a few 'weeks' worth left due to the Iran war and the closing of the Strait of Hormuz for shipping.
Birol told reporters, while attending the Group of Seven Finance Leaders meeting in Paris, that the release of strategic reserves has added 2.5 million barrels of crude oil per day to market. However, he said, these reserves are "not?endless".
Birol said that the onset of spring planting and the summer travel season in the northern Hemisphere would drain inventories more quickly, as demand for jet fuel, diesel, fertilizer and gasoline will increase.
When asked about his remarks at the G7 meeting, he stated that he had described "a perceived gap between the physical and financial markets" in relation to oil.
Birol said that there was a "major surplus" in the oil market before Israel and the U.S. launched their attacks on Iran, at the end of February. Commercial inventories were also very high. The war has caused a rapid change in the oil market.
He said that commercial inventories will last for "several week, but it's important to be aware that they are declining rapidly".
The IEA warned last week that global oil supplies will fall short this?year due to the Iran conflict, which is causing havoc in the Middle East and dwindling inventories at an unprecedented rate. IEA previously?predicted a surplus for this year.
The IEA's latest monthly report on the oil market said that global oil inventories dropped at a record rate?in both March and April. They fell by 246 millions barrels.
In March, the 32-member IEA coordinated a release of stocks from strategic reserve that was unprecedented. They agreed to remove 400 million barrels to calm down markets.
On May 8, the release of 164 millions barrels was reported.
The agency has revised its forecast to a 3.9 million barrels per day drop in global oil supply by 2026, down from 1.5 million barrels per days. Reporting by Leigh Thomas in Paris, David Lawder in London and Dominique Vidalon at the Paris office; Editing by Sudip K. Gupta and Emelia S. Matarise.
(source: Reuters)
