The head of the International Energy Agency, Fatih Birol, warned Thursday during a conference in Toronto that global energy markets are heading toward a “turbulent phase,” in light of the continuing war in Iran and the loss of millions of barrels of oil it is causing daily.
These statements come at a time when Brent crude futures contracts fluctuated between $96 and more than $102 per barrel on Thursday, after mixed reports about a possible agreement to temporarily stop the war, and the possibility of reopening the Strait of Hormuz, which is a vital corridor for oil trade, and had been effectively closed since the outbreak of the conflict at the end of February.
Birol explained that this fluctuation is likely to continue, with supplies expected to gradually return after the end of the war.
“In my opinion, volatility will remain the dominant feature, and therefore the security of oil supplies will remain a key issue,” he said during the Canadian Growth Summit.
He called on Canada, the fourth largest oil producer in the world, to search for new partners and markets for its production, noting that other countries will also move towards diversifying their energy partnerships after the war with Iran, considering this a “natural” option.
He also confirmed that the International Energy Agency is ready to withdraw additional quantities of oil from its strategic reserves if the supply disruption resulting from the war continues, noting that the agency has so far used about 20% of its available reserves to limit the rise in prices.
