The global energy market is in a stranglehold, proving once again its dangerous vulnerability to geopolitical games and tightening the noose around the real economy. As oil reserves are falling at an unprecedented rate, prices are being driven up rapidly. As highlighted by related report by CNN Greece - citing the latest report of the International Energy Agency (IEA) - the war in the Middle East and the strategic blockade in the Strait of Hormuz have caused an unprecedented structural shock to global supply.
The main points of the energy crisis
Stock Collapse: In March and April, world stocks fell at a rate of 4 million barrels per day.
Losses in the Offer: Global supplies fell by 1.8 million barrels per day last month. Overall, since February, the losses amount to 12.8 million barrels per day.
Fall in Consumption: A sharp decline in global consumption is expected by 2.45 million barrels per day this quarter, marking the biggest drop since the 2020 pandemic.
Sectors at Risk: The strongest pressure is recorded in the petrochemical sector due to a shortage of raw materials, as well as in the aviation industry.
Price spike and the «Cartel» of supply
The market is expected to remain facing serious shortages by October, regardless of whether the conflicts end immediately. The blockade of Persian Gulf producers (Saudi Arabia, UAE, Iraq) has removed more than 1 billion barrels from the market, completely eliminating the oversupply foreseen for this year.
«Even if there is a solution to the conflict, it will take time - weeks and months - to get the flows through the Strait of Hormuz back to normal. The longer the tensions remain and the faster the stocks decline, the more pressure on prices we will see.», said Toril Bosoni, Head of the IEA's Markets and Petroleum Industry Department.
Record intervention with emergency stocks
In a desperate attempt to stop the crisis, the IEA has coordinated the release of mammoth reserves. Member states, including the US, Germany and Japan, pledged in March to release 400 million barrels from their strategic reserves. At the same time, increased flows from the Atlantic basin (USA, Brazil, Canada, Venezuela) are heading towards Asia to mitigate the deficit, forcibly changing the global energy map.
Europe is suffocating: aviation fuel is running out
Europe is facing perhaps the most immediate problem, especially in the run-up to the summer tourist season, with jet fuel supplies from the Middle East in free fall:
Imports plummeted from 330,000 barrels/day in March to just 60,000 barrels/day in April.
Net European imports reached only 70% of March levels.
The IEA warns that a replenishment of 80-90% of the lost quantities is required to avoid flight cancellations and shortages in the summer. Despite the increase in imports from the US and Nigeria (221,000 barrels per day in April), these supply chains are under suffocating pressure and are simply not sufficient to fill the huge gap left by the Persian Gulf crisis.
The International Energy Agency has announced that its annual forecast for 2027 will be delayed and is expected to be published next month as the market tries to balance the new, harsh data.
