/Agencia Reuters
Fatih Birol, director of the International Energy Agency (IEA), stated that commercial oil inventories are being depleted rapidly and that only a few weeks’ worth of stocks remain due to the war in Iran and the closure of the Strait of Hormuz to navigation.
Birol, who is participating in the Group of Seven (G7) finance leaders’ meeting in Paris, told journalists that the release of strategic hydrocarbon reserves had contributed 2.5 million barrels per day to the market, but warned that they “are not infinite.”
“The start of the spring planting season and summer travel in the northern hemisphere will deplete inventories more quickly as demand for diesel, fertilizers, jet fuel, and gasoline increases,” he added.
When asked about his comments at the G7 meeting, he said he described “a perception gap in the markets between the physical markets and the financial markets” for oil.
Birol noted that before the United States and Israel launched attacks against Iran in late February, there was a large surplus in oil markets and commercial inventories were very high. However, the situation has changed rapidly due to the war.
The IEA director stated that commercial inventories would last “several weeks, but we should be aware of the fact that they are declining rapidly.”
Last week, the IEA reported that global oil supply will be lower than total demand this year because the Iran conflict is wreaking havoc on Middle Eastern crude production.
The entity stated that inventories were being depleted at an unprecedented rate. Previously, the agency had forecast a surplus for 2026.
Global observed oil inventories fell at a record rate in March and April, declining by 246 million barrels, according to the IEA in its latest monthly oil market report.
The IEA, composed of 32 members, coordinated in March the largest release of strategic reserve stocks in history, agreeing to withdraw 400 million barrels in an attempt to calm markets.
Around 164 million barrels had already been released by May 8, according to the agency, adding that global oil supply will fall by about 3.9 million barrels per day throughout 2026 due to the war.
This would drastically cut its previous forecast, which had projected a decline of 1.5 million barrels per day.
