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Middle East hostilities keep physical oil market tight, IEA flags stocks

The IEA said June global oil supply rose 4.1 million barrels per day after a ceasefire, but production remained 9.4 million barrels per day below pre-war levels.

Reported · Written up by our desk · Energy

Oil prices have risen for more than a week as fighting in the Middle East continues, and the physical market is showing signs of tightness despite talk of a potential glut, according to OilPrice.

Traffic via the Strait of Hormuz is described as being paralyzed again, with tanker crossings sporadic as Iran and the United States intensify the exchange of fire, while global oil stocks are reported to be declining.

OilPrice cites the IEA Oil Market Report, saying that in June global oil supply rebounded sharply by 4.1 million barrels per day due to the ceasefire, but global production was still 9.4 million barrels per day lower than before the war began.

The outlet also notes that while the IEA said global observed inventories rose by 21 million barrels in June, OECD crude stocks fell by 62 million barrels after a 73 million barrel draw in the prior month, and it adds that the United States is nearing critically low levels in oil storage facilities due to continued drawdowns since the war began.

Latest closeWTI crude $79.00 ▼0.8%

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