Are global oil reserves sufficient to withstand renewed US-Iran war?
Analysts tell Al Jazeera that global emergency oil reserves could last only weeks if renewed US-Iran war closes the Strait of Hormuz.
Global emergency oil reserves may last only weeks if renewed war between the United States and Iran closes the Strait of Hormuz, analysts have told Al Jazeera, with prices already climbing towards five-month highs.
Brent crude rose more than $2 to $110.85 a barrel on Wednesday as attacks on tankers in and around Hormuz continued. A day earlier, Iran's Islamic Revolutionary Guard Corps said two tankers were 'set ablaze', while also claiming seven more tankers had been hit, a claim Washington dismissed, according to the report.
Al Jazeera's Nils Adler reported that the International Energy Agency's 32 members agreed in March to release a record 400 million barrels from emergency stocks, more than double the volume released after Russia's full-scale invasion of Ukraine. The United States pledged 172.2 million barrels from its Strategic Petroleum Reserve, which has since fallen to 283 million barrels — its lowest level since 1982.
Aaron Kildow, a senior crude oil analyst at Sparta Commodities, estimated that only about 400 million barrels of usable reserves remain worldwide, excluding China, with nearly half held in Japan. 'Europe is the real wildcard, both on timing and willingness,' he said.
Chris Beauchamp, chief market analyst at IG Group, warned that the world was fortunate the first Hormuz closure was brief: 'I don't think the global economy will be as lucky next time if there is a protracted conflict.'
Source: Al Jazeera English — TrendWire reports stories in its own words; facts should be confirmed against the original source.