Delays in oil product deliveries due to ships being diverted avoid attacks in the Red Sea are impacting product markets in Europe in particular, an International Energy Agency executive said on Wednesday.
“We’re currently seeing a difficult situation with respect to the Red Sea and the Suez canal,” Keisuke Sadamori, IEA’s director of energy markets and security, told Reuters on the sidelines of the India Energy Week at Goa, adding that there has been delays in various deliveries of oil products.
The Iran-aligned Houthis have been targeting commercial vessels with drones and missiles in the Red Sea since mid-November, in what they describe as acts of solidarity with Palestinians against Israel in the Gaza war.
Despite the delays and concerns about escalating tensions in the Middle East, global oil prices have eased with Brent trading below $80 a barrel this week.
“Markets are relatively comfortable with supply,” Sadamori said.
“Supply growth is happening outside OPEC+ group, mostly coming from U.S., Brazil, Guyana, and due to macroeconomic concerns demand growth is not so robust,” he added.
Sadamori said he does not expect Saudi Arabia’s decision to halt plans to expand its maximum sustainable capacity to 13 million barrels per day from 12 million bpd to have an immediate impact on global oil markets in the short term.
Ongoing production cuts by Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies have increased the amount of spare oil capacity available globally, he added.
(Reporting by Nidhi Verma; Writing by Florence Tan; Editing by Tom Hogue and Edwina Gibbs)