On 12/3, the International Energy Agency (IEA) announced that Gulf states had cut at least 10 million barrels of oil per day due to the ongoing conflict. This reduction, equivalent to nearly 10% of global oil demand, contributes to what the IEA describes as the largest global oil supply disruption in history. The conflict has led to the near blockade of the Strait of Hormuz, further reducing global oil supply by about 8 million barrels per day.
The Strait of Hormuz plays a crucial role in global energy trade. Situated between Oman and Iran, it connects the Persian Gulf to the north, the Gulf of Oman to the south, and extends further to the Arabian Sea. According to Kpler, last year over 14 million barrels of crude oil flowed through this vital strait daily, accounting for one-third of the world's total seaborne fuel exports.
Analysts at Rapidan Energy indicate that global oil supply has been disrupted by approximately 20% because vessels cannot pass through Hormuz. A few days ago, Rapidan Energy also assessed that the Middle East conflict was pushing the world into a record oil supply disruption. The energy consulting firm noted that their previous record for the largest disruption was during the 1956 Suez Crisis, when about 10% of global "black gold" (oil) supply was affected. A key difference this time, Rapidan Energy analysts highlight, is the near absence of global spare capacity to compensate. Saudi Arabia and the UAE, who hold most of this capacity, are also experiencing supply disruptions due to the Hormuz blockade.
In response, the IEA announced yesterday that member countries would release a record 400 million barrels of oil from strategic reserves to calm the global market. The US alone committed to releasing 172 million barrels, marking the largest intervention in the organization's history. The IEA also warned that if oil transportation is not restored soon, the supply deficit will increase. They added that upstream oil production takes weeks, even months, to return to pre-crisis levels.
Despite the IEA's announcement of a record reserve release, oil prices still rose 9% on the morning of 12/3. Brent crude climbed above USD 100 per barrel, while WTI reached approximately USD 95. By the close of trading, Brent prices had fallen to USD 96,24, and WTI to USD 91,05. Overall, investors remain concerned that the IEA's actions will not be enough to offset the current supply shortage. Concurrently, the IEA lowered its 2026 global oil demand growth forecast to 640,000 barrels per day, about 210,000 barrels lower than previously projected.
Tu Anh (according to Reuters)
