Global oil inventories could hit critical levels ahead of the peak summer demand period if stock draws continue at their current pace, the head of the International Energy Agency’s oil industry and markets division said on Tuesday.
“We’re seeing stock draws continuing into the summer, and with the possibility or the likelihood that we reach critical levels or historical low levels just ahead of the peak summer demand,” said Toril Bosoni.
It could take six to eight months in the best-case scenario to reopen the Strait of Hormuz if an agreement was reached today, Bosoni said at the S&P Global Energy Middle East Petroleum and Gas Conference in London.
That could make a further IEA-coordinated emergency stock release a possibility, but that is not currently being discussed as around half of the initial 400-million-barrel coordinated release from March is yet to hit the market, she added.
“In any case, emergency stock releases are only a temporary stop-gap measure, they’re not going to solve this problem. The scale of the supply losses are so big that the reduction would have to come from the demand side,” Bosoni said.
(Reporting by Robert Harvey and Shadia Nasralla in London, editing by Andrew Heavens and Alexander Smith)