SerpApi.Org
The International Energy Agency's member countries still hold "a substantial volume" of emergency oil reserves, including more than 1B barrels of government-controlled stocks, despite the largest coordinated release of strategic reserves on record, the agency reported Tuesday.
The IEA said 290M barrels of oil have been released by member countries since the release was announced on March 11, with more still continuing to flow to the market.
The agency agreed to release a record 400M barrels of oil from strategic stockpiles following the surge in global crude prices triggered by the U.S.-Iran war.
"We estimate that Gulf exports are below their late-June highs but are still considerably higher than the levels seen between early March and mid-June," IEA Executive Director Fatih Birol said.
While the report offers some comfort, Birol added there is "no room for complacency" regarding oil security, as tensions escalate again in the Middle East.
Birol noted that while deliveries of crude oil have ticked up, refinery activity and general product supplies have not increased at the same rate, which is adding pressure on prices for refined products such as diesel and gasoline.
Crude oil prices added another 2% to hit five-week highs Tuesday, as the U.S. continued its strikes on Iranian targets, Iran attacked U.S. bases and other sites around the Persian Gulf, and President Trump said the U.S. is not interested in a meeting until Iran is ready to meet in "a meaningful way," dampening hopes for a quick return to the negotiating table.
Adding to supply concerns are threats by Yemen's Houthi rebels against Saudi shipping in the Red Sea and Ukraine's attacks on Russian energy infrastructure.
Maritime traffic through the Strait of Hormuz has come to a near-halt, while any disruption to the Bab al-Mandab Strait by the Houthis would deal a significant blow to energy markets, analysts say.
At least five oil tankers inside or heading toward the Red Sea have reversed course, according to maritime intelligence company Windward.
The front-month Nymex August contract (CL1:COM) and the front-month Brent September contract (CO1:COM) both gained 2%, settling at $84.91/bbl and $91.01/bbl, respectively.
U.S. natural gas futures (NG1:COM) ended a rangebound session little changed as cooling demand in the south and central U.S. was tempered by milder temperatures in the east; the front-month Nymex August contract closed up 0.2% to $2.865/MMBtu.
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