Oil market ‘adequately’ supplied despite Mideast conflict: IEA

Global oil markets remain “adequately” supplied despite escalating tensions in the Middle East, the International Energy Agency said Tuesday, signalling that its member nations could act quickly to release reserves if necessary.

Iran’s missile attacks on Israel earlier this month sent crude prices soaring over fears that Israeli could launch retaliatory strikes that would disrupt supplies.

“Heightened oil supply security concerns are set against a backdrop of a global market that–as we have been highlighting for some time–looks adequately supplied,” the Paris-based IEA said in its monthly market report.

The agency said the end of a Libyan oil blockade, weaker demand and relatively modest output losses from hurricanes in the U.S. Gulf Coast “have helped to steady markets”.

“For now, oil exports from Iran and neighbouring countries are unaffected but the market remains on tenterhooks, awaiting the next developments in the crisis,” the IEA said.

“As supply developments unfold, the IEA stands ready to act if necessary,” it said.

The IEA was founded in 1974 to help coordinate collective responses to major disruptions of supplies in the wake of the 1973 oil crisis.

The organisation, which also analyses data and offers policy advice, now has 31 member nations, which range from the United States to Japan, Mexico, Turkey and European Union nations.

In 2022, IEA members tapped tens of millions of barrels of oil from emergency reserves to calm crude prices that soared following Russia’s invasion of Ukraine.

“As shown in 2022, the Agency and its member countries can quickly take collective action,” the IEA recalled, noting that its public stocks alone top 1.2 billion barrels.

It added that China holds 1.1 billion barrels of crude stocks.

“For now, supply keeps flowing, and in the absence of a major disruption, the market is faced with a sizeable surplus in the new year,” the IEA said.

The agency also forecast a “sharp slowdown” in global oil demand growth, expanding by just under 900,000 barrels per day in 2024 due to a deceleration in China.