A well-supplied global oil market means that consumers need not worry too much about the developments in the critical Strait of Hormuz, including the recent seizure of a UK-flagged oil tanker, where a standoff is on between Iran and other powers, the International Energy Agency (IEA) has said.
The IEA said it was closely monitoring developments in the strait and stood ready to act if needed.
“The IEA considers that the right of free energy transit is critical to the global economy and must be maintained,” it said in a statement.
The Strait of Hormuz is a vital maritime transit route for world energy trade, as about 20 million barrels of oil — or 20 percent of the global supply — transit each day through it.
It is also the route for around a quarter of global liquefied natural gas trade.
“Consumers can be reassured that the oil market is currently well supplied, with oil production exceeding demand in the first half of 2019, pushing up global stocks by 900,000 barrels per day. OECD commercial stocks now total more than 2.9 billion barrels, which is higher than the five-year average,” the IEA said.
IEA said its member countries hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by industry under government obligations, and can be released as needed. These IEA emergency stocks are large enough to cover any disruptions in oil supply from the Strait of Hormuz for an extended period.