The International Energy Agency reported this Monday that commercial oil reserves accumulated before the war in the Middle East and the closure of the Strait of Hormuz will be exhausted within weeks.
The executive director of the AIE, Fatih Birolwarned that reserves “are running out very quickly“, in statements to the press during the first day of the G7 finance ministers meeting in Paris.
According to Agência Lusa, it is not yet known whether the reservations will last weeks or months, but it is known that they are “decrease quickly”.
The closure of the Strait of Hormuz meant that the market did not have access to more than a billion barrels from Persian Gulf countries, and more than 14 million barrels per day were trapped.
Although several regions have increased their oil extraction, reserves between March and April reduced by 250 million barrels. Before the war in the Middle East, the market situation was one of excess oil, of around two barrels above demand.
With the start of summer, travel and agricultural activity are expected to increase, which will lead to a higher consumption of fuel and fertilizers. All of these elements contribute to raising prices, and this can have “important repercussions” on food prices, increasing inflation.
In March, several IEA countries placed on the market more than 400 million barrels of oil of its energy reserves to calm tensions in the market. A measure of this type could be repeated if the Strait of Hormuz remains closed.
The IEA estimates that the crisis triggered by the closure of Hormuz and the consequent rise in prices will result in a decrease in global oil demand of 420 thousand barrels per day, contrasting with the increase of 1.3 million barrels per day predicted before the start of the war.
