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Global energy supply at risk, IEA issues stark warning

The International Energy Agency (IEA) warns the world could face its worst energy crisis in decades. Fatih Birol, IEA chief, said conflicts in the Middle East, particularly around the Strait of Hormuz, have disrupted oil and gas shipments, raising prices sharply.

Damaged infrastructure and blocked exports threaten long-term supply. IEA countries released 400 million barrels from strategic reserves, but this is temporary.

Oil prices near $100 per barrel, and markets are volatile. Birol urged global cooperation to restore trade and stabilize energy security.

 

 

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IEA to release 400 mn barrels of oil

The International Energy Agency (IEA) has announced plans to release more than 400 million barrels of oil from emergency reserves into global markets in an effort to stabilise supplies and ease pressure on rising crude prices.

The decision comes at a time when the global oil market is facing significant uncertainty due to supply disruptions linked to escalating tensions in West Asia. These disruptions have particularly affected shipments through the Strait of Hormuz, one of the world’s most important oil transit routes through which a large share of global crude exports passes. Concerns over the safety of this route have pushed international oil prices sharply higher in recent weeks.

According to the Paris-based energy watchdog, IEA member countries have collectively committed about 411.9 million barrels of oil from their strategic reserves. Of this total, 271.7 million barrels will come from government-controlled reserves, while 116.6 million barrels will be supplied from industry stocks held under government obligations. Another 23.6 million barrels will be released from additional reserve sources.

The majority of the planned release, around 72 per cent, will consist of crude oil, while the remaining share will include refined petroleum products such as diesel and gasoline. The oil will be supplied in stages to ensure steady availability in the market.

The IEA stated that oil reserves from Asia and Oceania will begin entering the market immediately. Supplies from Europe and the Americas are expected to start flowing by the end of March, helping improve global availability of crude and fuel products.

IEA Executive Director Fatih Birol said the coordinated release is intended to counter one of the most serious disruptions to global oil supply in recent years. The move represents the largest emergency stock release coordinated by the IEA since the agency was established in 1974.

Energy analysts believe the additional supply could help calm volatile markets and moderate fuel prices in the short term. However, experts caution that the relief may be temporary if shipping disruptions in the Strait of Hormuz persist.

The IEA has previously coordinated similar emergency releases during major global crises, including the 1991 Gulf War, the 2011 Libya crisis, and the 2022 Russia-Ukraine conflict, when supply shocks threatened global energy stability.

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Oil tops $100 after tanker attacks in Iraqi waters

Global oil prices jumped sharply on Thursday after reports that two oil tankers were attacked in Iraqi waters near the Gulf of Hormuz, a key route for about one-fifth of the world’s oil shipments. The attacks stoked fears that ongoing Middle East conflicts could further disrupt crude supply and push prices even higher.

Brent crude briefly rose above $100 per barrel, while US West Texas Intermediate (WTI) oil also climbed significantly. Traders reacted to the news of port shutdowns and fires caused by the attacks, which forced temporary halts at some terminals.

The attacks come amid escalating tensions involving Iran, the United States, and Israel, heightening worries about shipping safety in the region. Analysts said that disruptions in the Gulf, especially around the Strait of Hormuz,  could severely affect global oil supply, since the area is critical for transporting crude to international markets.

Governments are trying to ease the pressure. The International Energy Agency (IEA) announced the release of 400 million barrels from global reserves, while the US released 172 million barrels from its strategic reserves to help stabilize prices. Despite these measures, uncertainty continues, and traders are factoring in the risk of more disruptions.

Experts warn that higher oil prices could increase costs for fuel, transportation, and goods worldwide, adding to inflation concerns already affecting many countries. The recent surge shows how sensitive global energy markets are to geopolitical tensions and how a single incident can ripple through economies.

Investors and policymakers are watching the situation closely. Any further escalation in the region or continued attacks on tankers could keep oil prices volatile, impacting businesses and consumers globally.

Also Read: India backs record IEA oil reserve release

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India backs record IEA oil reserve release

India has said it is ready to support global oil markets after the International Energy Agency (IEA) announced a record release of oil from emergency reserves to ease supply concerns and stabilise prices.

The IEA said its member countries would release around 400 million barrels of oil from their strategic petroleum reserves. The move is aimed at increasing supply in global markets and reducing pressure on oil prices, which have risen due to supply disruptions and geopolitical tensions.

The Government of India said it is closely monitoring developments in international energy markets and supports efforts to ensure stability in global oil supplies. Officials said India stands ready to take suitable steps if required to help maintain market balance, though no specific measures have been announced so far.

The emergency release comes as tensions in parts of the Middle East have raised concerns about disruptions to oil supply routes. These concerns have pushed up global crude prices and increased uncertainty in energy markets.

According to the IEA, the coordinated release of oil reserves is the largest in the organisation’s history. Member countries will release oil based on their individual capacities and national conditions to ensure markets receive additional supply in the coming months.

Although India is not a full member, it works closely with the IEA as an associate member and participates in discussions on global energy security. As one of the world’s largest oil importers, India is highly sensitive to changes in global oil prices and supply disruptions.

Officials said India continues to strengthen its own strategic petroleum reserves and diversify its sources of crude oil imports to improve energy security.

Experts believe the large reserve release could help calm markets in the short term by increasing available supply. However, they also note that long-term stability will depend on how geopolitical tensions evolve and whether key global oil supply routes remain stable.

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