SINGAPORE, Oct 22: The global oil market is well-supplied and only a serious supply disruption will merit any release of strategic oil stocks, the head of the International Energy Agency (IEA) said on Monday.
‘The market is sufficiently well supplied,’ Maria van der Hoeven, executive director of the IEA, the West’s energy watchdog, said at the Singapore International Energy Week.
Brent has stayed above $100 a barrel for most of this year due to concerns over supply disruptions as the United States and Europe slap heavy sanctions on Iran in a bid to force the Islamic Republic to abandon a controversial nuclear programme.
Iran’s exports have fallen sharply in the wake of the sanctions as consumers struggle both to pay for the oil and to secure insurance cover for tankers to ship the crude.
‘We keep monitoring the situation, as we can see that there is around 1 million barrels a day of Iranian oil or maybe even a little more not in the market anymore,’ Van der Hoeven said.
Rising energy costs have prompted President Barack Obama, who is seeking re-election next month, to talk of tapping strategic petroleum reserves (SPR) as one option to dampen prices and prevent high costs from undermining the sanctions on Iran.
Van der Hoeven said stocks would be released in the event of a serious disruption, echoing earlier comments that higher prices alone did not justify a release of strategic reserves and that increasing crude output from other producers had adjusted for the loss of Iranian barrels.
‘If there is a serious physical disruption of supply there’s always an opportunity to act because the stocks are there,’ she said.
In answer to a question, Van der Hoeven said Iranian oil supply could fall more if sanctions continued.
‘But at the same time we have more new oil coming into the market,’ she added, referring to North American shale oil.
The IEA represents 28 oil importing countries. (agencies)
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