International Energy Agency warns oil inventories could fall to critical levels

International Energy Agency official Toril Bosoni warned that global oil inventories could reach historically low levels before the peak summer demand season if current stock drawdowns continue.

Speaking at the Middle East Oil & Gas Conference organized by S&P Global in London, Bosoni said: “We are seeing stock drawdowns continue into the summer, with the possibility or likelihood that we will reach critical or historically low levels just before the peak summer demand period.”

According to Bosoni, the reopening of the Strait of Hormuz could take between six and eight months even if a political agreement were reached immediately.

She explained that this scenario could eventually require additional coordinated releases from strategic emergency reserves overseen by the International Energy Agency. However, she noted that such discussions are not currently underway because the market has not yet absorbed even half of the approximately 400 million barrels previously released from emergency stockpiles in March.

Bosoni emphasized that emergency reserve releases can only provide temporary relief and do not address the underlying supply challenge. “Releasing emergency stockpiles is only a temporary measure and will not solve the problem” she added.

According to her assessment, the scale of current supply disruptions is large enough that balancing the market may ultimately require demand reductions in addition to any emergency measures.

The comments reflect continuing concerns within energy markets about supply availability, inventory levels, and the impact of disruptions affecting oil exports from the Gulf region as global consumption moves toward its seasonal summer peak.

READ: Hormuz disruptions could raise vulnerable economies’ oil import costs by $20B per year: UN trade agency