The war in the Middle East has caused the “the largest supply disruption in the history of the global oil market,” the International Energy Agency said on Thursday, as Iran stepped up its attacks on tankers in the region.
Before the war, 20 million barrels of oil passed daily through the Strait of Hormuz, the narrow waterway off Iran’s southern coast. That amount has plunged to “a trickle,” the I.E.A. said in its monthly report, since Iran warned that ships passing through were at risk of attack.
This week, the 32 member states of the I.E.A. agreed to release 400 million barrels of oil from their strategic reserves, the most ever and the first coordinated release since Russia’s full-scale invasion of Ukraine in 2022.
But the move did not immediately arrest the rise in oil prices. The price of Brent crude, the global benchmark, climbed briefly back above $100 a barrel on Thursday, about $30 higher than it was at the end of February, before the U.S.-Israeli military assault on Iran. The supply disruptions caused by the war showed little sign of abating with tankers in the Persian Gulf on fire after coming under attack and Iraq closing its oil port terminals.
As Gulf countries struggle to export their oil, they have curtailed production by at least 10 million barrels a day, as oil storage fill up. Exports of other refined products and liquefied petroleum gas is also effectively at a standstill, the I.E.A. said.
The widespread cancellations of flights in the Middle East caused by closed airspaces and disruptions to liquefied petroleum gas supplies are expected to curb global oil demand by one million barrels a day in March and April, the agency added.
The effect of the supply disruptions has been rippling around the globe. Some countries have taken measures to control fuel demand and shield customers from high costs. Pakistan has closed schools and ordered government offices to operate four days a week and South Korea said this week that it would cap prices at the pump for the first time in nearly 30 years. In France, TotalEnergies, one of the country’s biggest energy companies, said on Thursday that it would cap prices for gas and diesel until the end of the month.
On Wednesday, Ursula von der Leyen, the president of the European Commission, said households and companies needed relief from high energy costs. The commission was even “exploring subsidies or capping the gas price,” she said, while urging countries to lower taxes on electricity.
Eshe Nelson is a Times reporter based in London, covering economics and business news.
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