Oil extends rally as IEA warns of biggest supply disruption in history, more tankers hit
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The news: The International Energy Agency (IEA) slashed its forecast for oil-supply and warned that the current conflict in the Middle East is creating the “largest supply disruption in the history of the global oil market” in its monthly report.
The context: The IEA report, released Thursday, comes one day after the 32-nation agency agreed to an historic emergency stock release as the US-Iran war severely disrupts flows through the critical oil-transit route, the Strait of Hormuz.
Flows through the strait are down by more than 90%, the IEA estimates, with the conflict expected to reduce global oil supply by 8 million barrels per day this month.
The IEA said it expects oil supply to grow by just 1.1 million barrels per day in 2026, down from a previous forecast of 2.4 million barrels. It added that it now expects global consumption growth this year to be reduced by roughly 25% to 640,000 barrels a day.
Seven ships have been hit in waters surround Iran over the past day, including three oil tankers that were struck in the Persian Gulf overnight, two left ablaze and leaking oil into Iraqi waters.
The numbers: The price of Brent crude rose back above USD100 per barrel on Thursday, before easing slightly to USD98.23 per barrel at 9:18am ET (12:18 AEDT Friday).
