IEA sees possibility of critically low oil stockpiles ahead of peak summer demand

[LONDON] Global oil inventories could hit critical levels ahead of the peak summer demand period if stock draws continue at their current pace, said the head of the International Energy Agency’s (IEA) oil industry and markets division.

On Tuesday (Jun 2), Toril Bosoni said: “We’re seeing stock draws continuing into the summer, and with the possibility or the likelihood that we reach critical levels or historical low levels just ahead of the peak summer demand.”

It could take six to eight months in the best-case scenario to reopen the Strait of Hormuz if an agreement was reached today, she added, while speaking at the S&P Global Energy Middle East Petroleum and Gas Conference in London.

That could make a further IEA-coordinated emergency stock release a possibility, but that is currently not being discussed – as around half of the initial 400-million-barrel coordinated release from March is yet to hit the market, she said.

“In any case, emergency stock releases are only a temporary stop-gap measure, they’re not going to solve this problem,” she added.

“The scale of the supply losses are so big that the reduction would have to come from the demand side.” REUTERS