Birol: IEA Concerned About Tensions in Hormuz Strait

EghtesadOnline: The International Energy Agency is "significantly" concerned about geopolitical tensions, including in the Strait of Hormuz, but oil markets are currently well supplied and unlikely to see "huge price increases for now," the head of the agency said Friday.

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20 July 2019

"At present, we have lots of oil in the market. So, in a normal world, we don't expect huge price increases," IEA executive director Fatih Birol told reporters on the sidelines of an industry conference in New Delhi, S&P Global reported.

"A substantial amount of oil is coming from the US, about 1.8 million bpd, plus oil from Iraq, Brazil and Libya," he said.

"Having said that, there are serious political tensions around the world, including the one in the most important Strait of Hormuz, and that is something that concerns the IEA significantly," Financial Tribune quoted him as saying.

"It will be only a big surprise if you see the price jump, but political tensions may impact those dynamics."

Crude oil futures remained more than 1% higher in mid-afternoon trade Asia Friday following reports that an Iranian drone had been shot down by a US navy ship, further escalating tensions between the two countries.

On Friday front-month ICE Brent September futures were up 95 cents per barrel (1.53%) from Thursday's settle at $62.88 per barrel, while the front-month NYMEX August light sweet crude futures contract was 58 cents per barrel (1.05%) higher at $55.88 per barrel.

"Today, about 18 million barrels of oil on a daily basis flows through this choke point coming from Saudi Arabia, Emirates and other countries to China, Japan, India and other Asian customers," he added.