International Energy Agency chief Fatih Birol stated during European trading hours that the current oil supply crisis is worse than the crises of the 1970s and the Russia-related disruption in 2022 combined. Birol highlighted that approximately 40 key energy assets have been damaged in the Middle East, resulting in a loss of over 12 million barrels per day (bpd) of oil supply so far. He warned that the oil loss in April is expected to be twice as high as in March, with the biggest problem being shortages of jet fuel and diesel. These shortages are already impacting Asia and are expected to affect Europe between April and May. Birol also mentioned the possibility of further releases from strategic reserves and intervention if crude oil supply needs arise [1].
Meanwhile, ING analysts Ewa Manthey and Warren Patterson reported that oil prices, including Brent and WTI, have fallen below $100 per barrel following US President Trump's signal of a possible end to the war with Iran. Trump indicated that the US could leave Iran within two to three weeks, suggesting that an agreement with Tehran may not be necessary for the conflict to end. Despite optimism, ING analysts cautioned that even if the Strait of Hormuz reopens, clearing the vessel backlog and normalizing production, exports, and LNG flows will take time [2].
Market reactions have been mixed. WTI Oil price recovered half of its early losses as global leaders, including Birol, warned of a persistent energy crisis. As of the latest report, WTI Oil price was trading 1.4% lower near $95.50 [1]. In US inventory data, API figures showed crude stocks rose by 10.3 million barrels last week, significantly above expectations for a 1.3 million barrel build. Gasoline and distillate inventories fell by 3.2 million barrels and 1.04 million barrels, respectively, which should continue to support product cracks. The EIA report is expected later [2].
In gas markets, European prices dropped sharply, with TTF down more than 7.7% on Tuesday amid favorable weather forecasts and hopes for de-escalation in the Iran conflict. EU gas storage levels have fallen to 28% as of March 30, below the five-year average of 41%, prompting the Energy Commissioner to urge early injections to avoid a late-season supply crunch [2].
CONCLUSION
The ongoing Middle East crisis has severely disrupted oil supply, with significant asset damage and escalating shortages, while recent signals of de-escalation in the Iran conflict have led to a drop in oil and gas prices. Despite some optimism, market volatility remains high due to persistent supply concerns and inventory fluctuations. Forward-looking statements suggest continued intervention and caution as normalization of flows and inventories will take time.