Global oil stock levels risk falling dangerously low in July and August, the Director of the International Energy Agency (IEA) has warned, as summer travel pushes demand for jet fuel and petrol to seasonal peaks.
Reserves were, however, well-stocked before the latest geopolitical tensions. "In recent years, the market had surplus capacity," said Eric Bleyer, President of the Groupement Energies Mobilité Luxembourg. "Now, we are entering a phase where stocks are gradually running down. If the Strait does not reopen quickly, we risk running short of certain products."
The IEA Director has described the current situation as approaching a "red zone," highlighting the severity of the threat to global energy security if the crisis persists.
A resolution to the Iran conflict remains the sector's only route to relief, which would allow oil shipments to resume through the Strait of Hormuz. Without this, both stock levels and prices could reach critical points.
"If the Strait remains closed for a prolonged period, prices will remain high or could rise even further," Bleyer said, adding that it's the reason why a tripartite meeting is being convened. "The main topic will be what measures we can and should take to support the industry and consumers."
Meanwhile, the International Energy Agency estimates that the market is currently short by 14 million barrels of oil per day.
