Global Oil Stocks Plummet at Record Pace as Hormuz Crisis Shuts in 14 Million Barrels, Says IEA

More than ten weeks into the Middle East conflict, the global energy market is grappling with an unprecedented supply shock that has shut in 14.4 million barrels per day of Gulf production, according to the International Energy Agency's oil market report released on Wednesday.

The effective closure of the Strait of Hormuz has already resulted in cumulative supply losses exceeding one billion barrels, forcing global oil inventories to draw down at a record pace of 4 mmbbl/d over March and April, the agency noted.

The supply vacuum has triggered a massive realignment of global trade flows, with Atlantic Basin exports surging by 3.5 mmbbl/d since February to reach hard-hit East of Suez markets, it said.

Producers in the US, Brazil, Canada, and Kazakhstan have pushed output to record levels, while a temporary waiver on Russian oil-on-water sanctions has provided marginal relief, IEA added.

Despite these efforts, global oil supply is projected to decline by an average of 3.9 mmbbl/d for the full year 2026, as per the report.

On the demand side, global oil demand is now forecast to shrink by 420,000 b/d year over year in 2026 -- a downward revision of 1.3 mb/d from pre-war estimates.

The second quarter of 2026 is expected to be the most severe, with demand dropping by 2.45 mmbbl/d as the petrochemical and aviation sectors reel from high prices and supply constraints, IEA said.

While demand may return to growth by the fourth quarter if a diplomatic resolution allows for a gradual reopening of the Strait in July, analysts warn that supply recovery will likely lag, ensuring continued volatility through the peak summer travel season.

EMEA Natural Gas Update: Futures Down Despite Mounting Concerns of Prolonged Hormuz Disruption

European natural gas futures edged lower on Wednesday, while still holding on to gains from previous sessions, as concerns persist about a protracted conflict and supply disruptions in the Middle East.The front-month Dutch TTF contract was down 0.17% to 46.60 euros ($54.56) per megawatt-hour, while the UK NBP front-month dropped 0.31% to 114.44 British pence ($1.55) per therm.This comes following US President Donald Trump's rejection of Iran's response to the US-backed peace proposal last week. Trump has since commented that the current ceasefire between the two sides was "unbelievably weak" and on "massive life support," hinting at a potential re-escalation in the conflict.Iran's Foreign Minister, Seyyed Abbas Araghchi, said on Tuesday that the country was working on a new set of rules to facilitate safe passage through the Strait of Hormuz, during a meeting with the Deputy Foreign Minister of Norway Andreas Motzfeldt Kravik, according to a report by Tasnim News Agency.Meanwhile, the strategically crucial Strait remained effectively closed for the 11th week running, with just 8 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.The rally in natural gas prices has been limited as LNG cargoes began emerging from the Persian Gulf, and Qatar asking more ships to begin transiting the Strait with their transponders turned off, according to Daniel Hynes, a senior commodity strategist at ANZ.This comes at a critical juncture for Europe, as it begins refilling natural gas inventories at significantly depleted levels, of just 35.6% of capacity, compared to the five-year average of 48.1%, according to data compiled by the Swiss Federal Office of Energy.

Market Chatter: Iraq, Pakistan Strike Bilateral Energy Pacts With Iran For Passage via Hormuz

Iraq and Pakistan have reached separate bilateral agreements with Iran to facilitate the shipment of crude oil and liquefied natural gas through the Strait of Hormuz, according to a Reuters report on Tuesday.These deals underscore Tehran's evolving strategy from blocking the strategic chokepoint to actively controlling its access, as per the report.Amidst the ongoing regional conflict that has slashed energy exports by nearly 80%, these arrangements allowed two Iraqi supertankers carrying 4 million barrels of crude to transit the strait on Sunday, while two vessels of Qatari LNG are currently en route to Pakistan to meet soaring summer electricity demands, the report said.For Iraq, the agreement is a fiscal necessity, as oil revenues constitute 95% of its national budget.The report further noted that Baghdad is currently coordinating with Tehran to secure further approvals for transits, involving a rigorous documentation process.Specialized teams at the Iraqi Oil Ministry are reportedly providing Iranian naval forces with granular data on every vessel, including cargo specifications and ownership details, to navigate designated maritime routes.Similarly, while Qatar was not a direct signatory to the Pakistan-Iran pact, it reportedly informed Washington ahead of the LNG shipments to Islamabad to ensure diplomatic transparency, it said.Despite the heightened military presence and US blockades on Iranian ports, these shipments proceeded without direct payments to Iran or the Islamic Revolutionary Guard Corps, the report stated.With maritime traffic through the Strait of Hormuz currently at just 5% of pre-war levels, other energy-dependent nations are reportedly exploring similar safe passage frameworks as global Brent crude prices remain 50% higher than February levels, it added.None of the parties involved responded immediately to' request for comments.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Global Oil Stocks Plummet at Record Pace as Hormuz Crisis Shuts in 14 Million Barrels, Says IEA

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EMEA Natural Gas Update: Futures Down Despite Mounting Concerns of Prolonged Hormuz Disruption

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Oil & Energy2h ago
EMEA Natural Gas Update: Futures Down Despite Mounting Concerns of Prolonged Hormuz Disruption
European natural gas futures edged lower on Wednesday, while still holding on to gains from previous sessions, as concerns persist about a protracted conflict and supply disruptions in the Middle East.The front-month Dutch TTF contract was down 0.17% to 46.60 euros ($54.56) per megawatt-hour, while the UK NBP front-month dropped 0.31% to 114.44 British pence ($1.55) per therm.This comes following US President Donald Trump's rejection of Iran's response to the US-backed peace proposal last week. Trump has since commented that the current ceasefire between the two sides was "unbelievably weak" and on "massive life support," hinting at a potential re-escalation in the conflict.Iran's Foreign Minister, Seyyed Abbas Araghchi, said on Tuesday that the country was working on a new set of rules to facilitate safe passage through the Strait of Hormuz, during a meeting with the Deputy Foreign Minister of Norway Andreas Motzfeldt Kravik, according to a report by Tasnim News Agency.Meanwhile, the strategically crucial Strait remained effectively closed for the 11th week running, with just 8 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.The rally in natural gas prices has been limited as LNG cargoes began emerging from the Persian Gulf, and Qatar asking more ships to begin transiting the Strait with their transponders turned off, according to Daniel Hynes, a senior commodity strategist at ANZ.This comes at a critical juncture for Europe, as it begins refilling natural gas inventories at significantly depleted levels, of just 35.6% of capacity, compared to the five-year average of 48.1%, according to data compiled by the Swiss Federal Office of Energy.

Oil & Energy2h ago
Market Chatter: Iraq, Pakistan Strike Bilateral Energy Pacts With Iran For Passage via Hormuz
Iraq and Pakistan have reached separate bilateral agreements with Iran to facilitate the shipment of crude oil and liquefied natural gas through the Strait of Hormuz, according to a Reuters report on Tuesday.These deals underscore Tehran's evolving strategy from blocking the strategic chokepoint to actively controlling its access, as per the report.Amidst the ongoing regional conflict that has slashed energy exports by nearly 80%, these arrangements allowed two Iraqi supertankers carrying 4 million barrels of crude to transit the strait on Sunday, while two vessels of Qatari LNG are currently en route to Pakistan to meet soaring summer electricity demands, the report said.For Iraq, the agreement is a fiscal necessity, as oil revenues constitute 95% of its national budget.The report further noted that Baghdad is currently coordinating with Tehran to secure further approvals for transits, involving a rigorous documentation process.Specialized teams at the Iraqi Oil Ministry are reportedly providing Iranian naval forces with granular data on every vessel, including cargo specifications and ownership details, to navigate designated maritime routes.Similarly, while Qatar was not a direct signatory to the Pakistan-Iran pact, it reportedly informed Washington ahead of the LNG shipments to Islamabad to ensure diplomatic transparency, it said.Despite the heightened military presence and US blockades on Iranian ports, these shipments proceeded without direct payments to Iran or the Islamic Revolutionary Guard Corps, the report stated.With maritime traffic through the Strait of Hormuz currently at just 5% of pre-war levels, other energy-dependent nations are reportedly exploring similar safe passage frameworks as global Brent crude prices remain 50% higher than February levels, it added.None of the parties involved responded immediately to' request for comments.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Oil & Energy2h ago
IEA Forecasts Oil Market to Remain in Deficit Until Q4