IEA Declares Largest Ever Global Oil Supply Disruption

Headquartered in Paris, France, the IEA (International Energy Agency) has recently declared that the current Middle East Crisis is responsible for the creation of what will most likely be the largest supply disruption the global oil market has ever encountered. The closing of the Strait of Hormuz is eroding the current oil surplus, and it is forcing energy producers and exporters within the Persian Gulf to cut output. 

Officials from the IEA have estimated that the current US/Iran/Israel conflict will cut global oil supply by 8 Million/bls a day this month, and they went on to confirm that overall exports of crude oil and other products through the Strait of Hormuz are already down by circa 90%. Original predictions by the IEA for 2026 was for a record oil glut/surplus, these have now been dramatically reduced. As of Wednesday last week, the IEA announced that members (32 OECD* nations) had approved to let go 400 Million/bls from emergency reserves.

*OECD – Based in Paris, France the Organisation for Economic Co-operation and Development is an international forum of 38, mostly industrialised countries that promote policies to improve economic and social well-being worldwide. Founded in 1961, it acts as a knowledge-based organisation developing standards and research to improve trade, financial stability and public policy.

Despite output losses from the Persian gulf being slightly set off by increased production from non-OPEC (Organisation of Petroleum Exporting Countries), the IEA has said that the effects of the closure of the Strait of Hormuz will be felt well beyond the time that the Strait is reopened. Sadly, consumers in many countries around the world will be forced to endure for many months, maybe years, higher prices for food, petrol and diesel, airline flights, restaurants and many other day-to-day  purchases.