The war in the Middle East is creating the biggest oil supply disruption in history, the International Energy Agency says, a day after it agreed to release a record volume from strategic stockpiles to offset shortages and a spike in prices.
Global supply is expected to drop by eight million barrels a day in March, the IEA said in its latest monthly oil market report, due to the blocking of the Strait of Hormuz, a narrow channel along the Iranian coast, since the US and Israel began a campaign of air strikes on Iran on February 28.
Middle East Gulf countries including Iraq, Qatar, Kuwait, the United Arab Emirates and Saudi Arabia have cut total oil production by at least 10 million bpd - a volume equal to almost 10 per cent of world demand - as a result of the conflict, the IEA said.
The agency added that, without a rapid restart of shipping flows, these losses were set to increase.
"Shut-in upstream production will take weeks and, in some cases, months to return to pre-crisis levels depending on the degree of field complexity and the timing for workers, equipment and resources to return to the region," the agency said on Thursday.
The IEA, which advises industrialised countries, on Wednesday agreed to release a record 400 million barrels of oil from strategic stockpiles held by member nations to combat a spike in global crude prices since the start of the US-Israeli war on Iran, with the US contributing the bulk of the supply.
Oil prices rose on Thursday as Iran stepped up attacks on oil and transport facilities across the Middle East, raising fears of a prolonged conflict and continued oil-flow disruptions through the Strait of Hormuz.
Brent crude, which hit $US119.50 a barrel on Monday, its highest since mid-2022, was up more than six per cent on Thursday at just below $US98 a barrel.
