Link Securities | According to a report by Reuters, Fatih Birol, executive director of the International Energy Agency (IEA), stated that it will take around two years to recover the energy production lost in the Middle East due to the conflict between the United States and Iran. He said this would vary from country to country. In Iraq, for example, it would take much longer than in Saudi Arabia.
Furthermore, Birol added that the market was underestimating the consequences of a prolonged closure of the Strait of Hormuz. In this regard, he noted that oil and gas shipments that were already en route to their destinations before the war in Iran began have now arrived, which has mitigated the impact of the shortage, but no new tankers were loaded in March. There were no new deliveries of oil, gas or fuels to Asian markets. This gap is now beginning to become apparent. In his view, if the Strait of Hormuz does not reopen, we must prepare for significantly higher energy prices.
Asked whether the IEA might carry out another release of strategic oil reserves following the measure taken in March, Birol stated that the agency was ready to act immediately and decisively. He said they are not yet at that point, but the matter is definitely under consideration.
