The war in the Middle East is creating the biggest oil supply disruption in history, the International Energy Agency said yesterday, a day after it agreed to release a record volume from strategic stockpiles to offset shortages and a spike in prices.
Global supply is expected to drop by 8 million barrels per day in March, the IEA said in its latest monthly oil market report a volume equal to almost eight per cent of world demand due to the blocking of
the Strait of Hormuz, a narrow channel along the Iranian coast, since the US and Israel began airstrikes on Iran on February 28.
The outlook from the IEA, which advises industrialised countries, contrasts with its earlier warnings of a sizeable surplus on the market for the first quarter of 2026.
It added, however, that supply could rise in April as some Middle East Gulf producers use alternative export routes to bypass the Strait of Hormuz, and said that, for the year, production would still expand more quickly than global demand.
Oil prices rose yesterday, as Iran stepped up attacks on oil and transport facilities across the Middle East, raising fears of a prolonged conflict and continued oil-flow disruptions through the Strait.
Brent crude, which hit $119.50 a barrel on Monday, its highest since mid-2022, was up 9pc yesterday with Brent futures settling at $100.46 a barrel.
Middle East Gulf countries including Iraq, Qatar, Kuwait, the UAE and Saudi Arabia have cut total oil production by at least 10m barrels per day as a result of the conflict, the IEA said, adding that without a rapid restart of shipping flows these losses were set to increase.
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