The International Energy Agency (IEA) stated on Wednesday that approximately 40 major energy assets in the Middle East have been damaged as a result of the ongoing conflict between the U.S. and Israel on one side and Iran on the other. The agency confirmed the loss of over 12 million barrels per day (bpd) of oil supplies so far due to the Middle East crisis.
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Quoting Asharq Al-Awsat newspaper, IEA Executive Director Fatih Birol explained that "this crisis is worse than the oil crises of the 1970s and the loss of Russian gas in 2022 combined."
The war involving Iran has led to the disruption of the Strait of Hormuz, through which approximately 20% of the world's total oil and gas trade passed before the conflict. This disruption pushed oil prices to record levels exceeding $120 per barrel, amid fears that the upward trend could continue toward $150.
Furthermore, gas prices in Europe surged by more than 70%, given the continent's heavy reliance on gas imports from the Middle East.
Historic Strategic Reserve Release
In response, IEA member states have agreed to withdraw 400 million barrels of oil from their strategic stockpiles—the largest collective action in the agency's history—in an attempt to cool price levels.
"We are studying the possibility of withdrawing more strategic reserves if we see a need for crude oil or products; we may intervene," Birol added.
Grim Outlook for April
Birol predicted that the disruption of Middle East oil supplies would worsen in April, significantly impacting Europe as supplies dwindle due to the closure of the Strait of Hormuz.
"Oil losses in April will be double those of March, in addition to losses in Liquefied Natural Gas (LNG)," he stated. "The biggest problem today lies in the shortage of jet fuel and diesel. We are seeing this in Asia, but I believe it will reach Europe soon, in April or May."
