The International Energy Agency (IEA) said supply disruptions last month were at a record worst level due to the Middle East war that broke out on Feb. 28 and the closure of the Strait of Hormuz.
According to the IEA's April oil market report released on the 14th (local time), global oil supply this year (including condensates and natural gas liquids) is expected to decrease by an average of 1.5 million Barrel per day from last year. This sharply reverses the projection in last month's report of "an increase of 1.1 million Barrel per day" in just one month.
In March, the first full month after the Middle East war began, global oil supply fell by an average of 10.1 million Barrel per day to 97 million Barrel per day.
Production by the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+, a consultative body of major oil-producing countries, fell by 9.4 million Barrel per day to 42.4 million Barrel per day. Non-OPEC+ production decreased by 770,000 Barrel per day to 54.7 million Barrel per day, as Qatar's cuts outweighed increases in Brazil and the United States.
Global oil demand this year is expected to decrease by an average of 80,000 Barrel per day from last year. This marks a shift from last month's outlook for "an increase of 640,000 Barrel per day" to a decline.
In particular, second-quarter demand is expected to be down 1.5 million Barrel per day from a year earlier, the largest drop since 2020, when fuel consumption plunged during the COVID-19 pandemic.
In early April, crude oil and petroleum product shipments through the Strait of Hormuz were 3.8 million Barrel per day, about 20% of the prewar level (20 million Barrel per day).
Global oil inventories fell by 85 million Barrel in March alone. Outside the Gulf, inventories fell by a total of 205 million Barrel, or 6.6 million Barrel per day, while the blockade of the strait increased Middle East offshore inventories by 100 million Barrel and onshore inventories by 20 million Barrel.
The IEA said, "This report's outlook is based on the assumption that regular shipments of oil and gas from the Middle East to international markets will resume by midyear," adding, "Given the uncertainty of how events will unfold, this scenario may be too optimistic."
It added that if the war continues, "energy markets and countries around the world will need to prepare for serious disruptions in the coming months."