The war in the Middle East is creating the biggest oil supply disruption in history, the International Energy Agency said on Thursday, a day after it agreed to release a record volume from strategic stockpiles to offset shortages and a spike in prices.
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Global supply is expected to drop by 8 million barrels per day in March, the IEA said in its latest monthly oil market report, due to the blocking of the Strait of Hormuz, a narrow channel along the Iranian coast, since the U.S. and Israel began a campaign of airstrikes on Iran on Feb. 28.
Middle East Gulf countries including Iraq, Qatar, Kuwait, the United Arab Emirates, and Saudi Arabia have cut total oil production by at least 10 million bpd - a volume equal to almost 10% of world demand - as a result of the conflict, the IEA said.
The agency added that, without a rapid restart of shipping flows, these losses were set to increase.
"Shut-in upstream production will take weeks and, in some cases, months to return to pre-crisis levels depending on the degree of field complexity and the timing for workers, equipment and resources to return to the region," the agency said.
The IEA, which advises industrialized countries, on Wednesday agreed to release a record 400 million barrels of oil from strategic stockpiles held by member nations to combat a spike in global crude prices since the start of the U.S.-Israeli war on Iran, with the U.S. contributing the bulk of the supply.
Oil prices rose on Thursday, as Iran stepped up attacks on oil and transport facilities across the Middle East, raising fears of a prolonged conflict and continued oil-flow disruptions through the Strait of Hormuz.
Brent crude, which hit $119.50 a barrel on Monday, its highest since mid-2022, was up more than 6% on Thursday at just below $98 a barrel.
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