PARIS, July 21 (Xinhua) -- International Energy Agency (IEA) Executive Director Fatih Birol said on Tuesday that while the global oil market is benefiting from several buffering factors, recent developments in the Middle East have heightened concerns over energy supply security and added uncertainty to the market outlook.
In a statement, Birol outlined several factors able to cushion the global oil market. Gulf producers have maintained substantial supplies, with Saudi Arabia and the United Arab Emirates making significant efforts to keep oil flowing to global markets through alternative routes outside the Strait of Hormuz.
According to IEA estimates, oil exports from the Gulf, though below their late-June peak, remain well above the levels recorded between early March and mid-June. Meanwhile, increased crude exports from the United States, Brazil, Venezuela and Kazakhstan have partly offset the supply shortfall from the Gulf.
The continued release of strategic oil reserves by IEA member countries has also helped ease market pressures. Since March 11, member countries have released about 290 million barrels to the market. They still hold substantial emergency reserves, including more than 1 billion barrels under government control.
Meanwhile, the IEA warned that oil security risks should not be underestimated amid escalating hostilities and declining commercial inventories. Refining activity and supplies of refined products have recovered more slowly than crude oil supplies, leaving refined product markets, including diesel and gasoline, considerably tighter than the crude oil market.
In the natural gas market, increased liquefied natural gas (LNG) supplies from the United States, Canada and other producers have offset about 70 percent of the supply shortfall through the Strait of Hormuz. However, further delays in the recovery of Gulf exports could prolong market tightness and affect all LNG importers, including Europe, which is replenishing gas storage for next winter.
The IEA called for resolving the ongoing conflict, including a "full and unconditional" reopening of the Strait of Hormuz, to prevent a further deterioration in global energy security. ■
