International Energy Agency Executive Director Fatih Birol warned on Tuesday that global oil and gas markets remain highly vulnerable, as the Middle East conflict and shipping threats near key chokepoints strain supply chains.
Although crude markets have avoided a catastrophic shock due to alternative overland pipelines, increased production from non-Gulf exporters, and lower Chinese import demand, commercial inventories continue to shrink, Birol said.
Emergency stock releases by IEA member countries which have deployed roughly 290 million of the 400 million barrels made available since March have provided critical relief, yet diesel and gasoline markets are much more tightly supplied.
In natural gas markets, expanded LNG inflows from North America have offset about 70% of the lost volume via the Hormuz strait, but prolonged export bottlenecks risk keeping European storage refill efforts constrained ahead of winter.
The IEA maintains that a full and unconditional reopening of the Strait of Hormuz is ultimately essential to restore long-term stability and avert a deeper global energy security crisis.