Oil shock ‘largest supply disruption’ in history: IEA

The Middle East war is creating the largest supply disruption in the history of the global oil market, as Iran's chokehold on regional supplies forces Gulf producers to slash production, the International Energy Agency said on Thursday.
In its latest market report, the IEA said crude production was currently down by at least 8.0 million barrels per day.
The conflict, triggered on February 28 by American-Israeli attacks on Iran, is hampering the global economy's supply of oil and weakening production capacity.
The war has seen Iran tighten its chokehold on the Strait of Hormuz, through which a fifth of global crude passes, effectively all but shutting it down.
IEA said current flows through the strait were moving at less than 10 per cent of pre-crisis levels, which in 2025 were around 15 million barrels per day — with 'no signs of a de-escalation in hostilities or a clear timeline for a recovery in flows through the Strait.'
It stressed that a resumption of flows would be key in minimising the war's impact on global markets.
Against that backdrop, major European stock markets were off more than half of one per cent in early morning trading before recovering slightly. In Asia, Japan's Nikkei had shed one per cent at the close while Hong Kong closed off 0.7 per cent.
A threat from Tehran to bring down the global economy overshadowed an impending record release of strategic crude by the IEA. On Wednesday, it said its 32 members had agreed to unlock 400 million barrels of oil from reserves — their largest release ever.
'The co-ordinated emergency stock release provides a significant and welcome buffer, but in the absence of a swift resolution to the conflict, it remains a stop-gap measure,' the IEA warned.
The United States has proposed partially lifting sanctions against Russia in an attempt to offset the fallout from the Hormuz squeeze, but Group of Seven nations on Wednesday rejected the idea.

Coming out of the first talks between Moscow and Washington since the start of the war Russian President Vladimir Putin's envoy Kirill Dmitriev overnight hailed a 'productive meeting' with US negotiators in Florida after US President Donald Trump had indicated Putin wanted to be 'helpful' regarding the Iran conflict's energy fallout.
After his Miami meeting, Dmitriev said on Telegram both sides had 'discussed promising projects that could contribute to the restoration of Russian-American relations and the current crisis on global energy markets.'
He added Washington was beginning to understand better 'the key, systemic role of Russian oil and gas in ensuring the stability of the global economy.'
Oil prices have gyrated since the crisis began, rising more than 30 per cent to around $120 a barrel only to drop back.
Prices briefly topped $100 on Thursday but then fell again to around $92 a barrel albeit analysts predicted elevated prices for the forseeable future amid reports of more Iranian attacks on vessels, notably off the coast of Iraq.
The IEA said in its report that shortfall could be partially addressed with alternative routes such as transit through the Bab-el-Mandeb Strait from the Red Sea. However, this route has in recent years 'carried a risk of Houthi (rebel) attacks.'
Despite efforts to stave off the disruption via emergency stockpiles, the IEA forecast March global oil supplies would drop 8 million bpd to 98.8 million bpd for their lowest level in four years.
'For forecasting purposes, we have assumed only minimal flows through the Strait of Hormuz in March,' it stated.
The IEA added supply curtailments in the Middle East are being partly offset by higher output from non-OPEC+ producers, Kazakhstan and Russia. — AFP