IEA issues highest warning: Middle East conflict causing the biggest oil market chaos in history, global daily supply reduced by 8 million barrels this month.

The International Energy Agency (IEA) has stated that the recent conflicts related to Iran are causing unprecedented turmoil in the oil market, affecting approximately 7.5% of global oil supply, with a more significant impact on the export side. In its monthly report released on Thursday, the IEA pointed out, "The conflicts in the Middle East are causing the largest supply disruption in the history of the global oil market." The day before, member countries of the organization reached a unanimous decision to release an unprecedented 400 million barrels of emergency oil reserves in an attempt to stabilize the market. Following the attacks on Iran by the US and Israel on February 28, international oil prices surged significantly, leading to the suspension of oil tankers passing through the key passage of the Strait of Hormuz. The IEA estimates that last year, about 20 million barrels of crude oil and refined oil were transported through the strait on a daily basis, with the current flow reduced by over 90%. The IEA stated that the conflicts this month will sharply reduce global daily oil supply by 8 million barrels. The resulting price hikes, flight cancellations, and economic uncertainty are severely affecting demand, and the organization has significantly lowered its global consumption growth forecast for this year by 25% to 640,000 barrels per day, the lowest level since releasing the annual forecast in April last year. On Thursday, in the London market, Brent crude oil prices briefly rose above $100 per barrel. Earlier, two oil tankers were attacked in Iraqi waters, and Oman also evacuated its important oil export terminals. The IEA stated that although Saudi Arabia and the United Arab Emirates can transport some exports through alternative routes, the Strait of Hormuz has effectively been closed, forcing oil-producing countries in the Gulf region to collectively reduce production by about 1 million barrels per day. The supply shock has led the IEA to cut its forecast for global oil surplus in 2026 by over a third, to around 2.4 million barrels per day. Prior to the crisis, the IEA had forecasted a record surplus in global oil supply this year, driven by significant increases in production in the Americas, including the US, Canada, Guyana, and Brazil. The IEA mentioned that the production losses in the Middle East are partially offset by increased production from non-OPEC+ oil-producing countries, as well as from OPEC+ members such as Kazakhstan and Russia. The closure of the Strait of Hormuz also threatens approximately 4 million barrels per day of refining capacity in the region. Limited raw material supply makes it difficult for other regions to make up for the shortfall, posing particularly severe risks to diesel and aviation fuel supply. On Wednesday, IEA Executive Director Fatih Birol announced that the IEA member countries, consisting of 32 OECD countries, will release 400 million barrels of emergency oil reserves, but key details such as the pace and duration of the release were not specified. US Energy Secretary Chris Wright stated that the US will release 172 million barrels from the strategic petroleum reserve, though it will take approximately 120 days for the full release.