- This crisis is worse than the two in the 1970s and Russia-related in 2022 put together
- Some 40 key energy assets have been damaged in the Middle East
- More than 12 million bpd of oil supply has been lost so far to the Middle East crisis
- The oil loss in April is expected to be twice as high as in March
- The biggest problem is lack of jet fuel and diesel
- That is already affecting Asia and will be coming to Europe in April to May
- Taking into consideration further release of strategic reserves
- "If we think there is need of crude oil, we may intervene"
Those are some damning remarks by Birol on the current situation. While markets might be wanting to move on and tune up the optimism, it's best to remember that the reality of it all is not so simple.
As mentioned before, it might take weeks or even months for some key energy facilities to restart and get back up to speed. Just last week, Kuwait already warned that it would take 3 to 4 months to restore production to full capacity even if the war were to end today. And that is just one example.
And even if the war dies down, it will surely also take time for commercial vessels to resume operations amid fears that there will still be military strikes. The US may look to pull out but what about Israel? If tensions continue to flare up, who is to say that Iran will not keep its foot on the neck of the Strait of Hormuz?
There is still much uncertainty up in the air. As such, don't be too quick to dismiss the risks of oil prices keeping at a higher level in the next few weeks/months at least.
