International Energy Agency chief Fatih Birol said commercial oil inventories are falling rapidly and strategic reserves are finite as conflict involving Iran strains global energy markets.
By yourNEWS Media Newsroom
International Energy Agency Executive Director Fatih Birol warned Monday that global commercial oil inventories are being depleted at an accelerating pace due to ongoing conflict involving Iran and disruptions tied to the Strait of Hormuz, raising concerns about tightening supply conditions entering peak seasonal demand periods.
Speaking while attending meetings with Group of Seven finance officials in Paris, Birol said emergency releases from strategic petroleum reserves have temporarily stabilized markets but cautioned that reserve supplies are limited.
Birol said coordinated releases from strategic stockpiles have injected approximately 2.5 million barrels of oil per day into global markets, helping offset supply disruptions caused by the war and shipping instability in the Middle East.
However, he stressed that “these reserves are not endless.”
According to Birol, rising seasonal demand in the northern hemisphere is expected to accelerate inventory drawdowns in coming weeks as agricultural activity and summer travel increase consumption of diesel fuel, gasoline, jet fuel, and fertilizer-related petroleum products.
He also described what he called a widening disconnect between financial market sentiment and underlying physical oil supply conditions.
“I described a perception gap in the markets between the physical markets and the financial markets,” Birol said when discussing remarks delivered during the G7 meetings.
The IEA chief explained that before the United States and Israel launched military operations against Iran earlier this year, global oil markets had been facing substantial oversupply conditions and elevated inventory levels.
That situation has shifted dramatically following the outbreak of conflict, according to Birol.
He warned that current commercial oil inventories may only be sufficient for “several weeks,” adding that policymakers and markets should recognize that reserves are “declining rapidly.”
Last week, the International Energy Agency revised its outlook for global oil markets, warning that worldwide supply would likely fall short of demand this year because of disruptions connected to the Iran conflict and instability affecting Middle Eastern production and transportation routes.
The updated assessment marked a major reversal from earlier agency projections that had forecast a global oil surplus for the year.
According to the IEA’s latest monthly oil market report, observed global inventories declined by 246 million barrels across March and April, representing the steepest drawdown pace on record.
The agency’s 32 member nations coordinated what the IEA described as the largest emergency strategic reserve release in history earlier this year, authorizing the release of approximately 400 million barrels intended to calm energy markets and stabilize prices.
The agency stated that approximately 164 million barrels had already been released by May 8.
The IEA also sharply revised its forecast for global oil production declines related to the conflict.
The organization now expects global oil supply to fall by roughly 3.9 million barrels per day during 2026 due to the war and associated disruptions, a substantial increase from its earlier projection of a 1.5 million barrel-per-day decline.
The Strait of Hormuz remains one of the world’s most critical maritime energy corridors, carrying a significant share of internationally traded crude oil and liquefied natural gas shipments.
Ongoing instability in the region has fueled concerns among governments, energy traders, and manufacturers over possible supply shortages, price volatility, and broader economic consequences if shipping disruptions continue or expand further.
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