According to IEA’s statement, the Administration is ready to take action if needed, concerning the recent incidents that took place in the strait of Hormuz. IEA is of the opinion that free energy transit is crucial to the global economy and that’s how it has to be maintained.
The Administration noted that the Strait of Hormuz sees approximately 20 million barrels of oil passing every day, which equals to the 20% of the global supply. Also, the Strait is the route for about a quarter of global LNG trade.
Consumers can be reassured that the oil market is currently well supplied, with oil production exceeding demand in the first half of 2019, pushing up global stocks by 900,000 barrels per day.
IEA’s executive director, Dr Fatih Birol, is under discussions with ministerial counterparts in IEA member and associate governments as well as in other major consuming and producing nations.
Thus, the Administration is on an active position to rapidly act in the possibility of a disruption, to make sure that the global markets aren’t affected.
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Up to now, OECD commercial stocks total more than 2.9 billion barrels, which is higher than the five-year average, so the possibility of another disruption may have a crucial impact.
IEA countries hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by industry under government obligations, and can be released as needed. These IEA emergency stocks are large enough to cover any disruptions in oil supply from the Strait of Hormuz for an extended period.
