In an event hosted by the Atlantic Council earlier in the week, Birol said that nearly 13 million barrels a day of oil supply has been shut due to the conflict and closure of the Strait of Hormuz.
Birol also warned that more than 80 energy facilities have been damaged during the hostilities and a recovery could take as long as two years. The IEA has already termed this as the biggest supply disruption in history.
“Prices are already high, but they are not reflecting the severity of the problem — I agree there is a disconnect,” Birol said. “But I think soon we will see they will converge, which is an extremely sensitive issue for the global economy.”
Brent crude prices fell to $95 a barrel on Tuesday, while the West Texas Intermediate (WTI) is testing levels of $90 a barrel on Wednesday during early Asian trading, significantly below the early-war highs of $120 a barrel, as the market is hopeful of more talks between the US and Iran, which would ultimately lead to a resolution.
Last month, IEA members such as the US, Japan and Germany agreed an unprecedented release of emergency oil stockpiles to help calm markets.
(With Inputs From Agencies)
