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By Wa Lone and Shariq Khan
TORONTO, May 7 (Reuters) – Global energy markets are headed into ‘troubled waters’ as the Iran war continues to knock out millions of barrels of oil each day, Fatih Birol, head of the International Energy Agency, said on Thursday at a conference in Toronto.
His comments come as Brent oil futures were seesawing between $96 and over $102 a barrel on Thursday following mixed reports of a short-term deal to end the war and possibly reopen the Strait of Hormuz, a key trade choke-point that has been effectively shut since the conflict started at the end of February.
Birol warned that such volatility will likely continue and that the return of supply will be gradual once the war ends.
“In my view, the name of the game could well be the volatility, as such, oil security will still be a key issue,” he said while speaking at the Canada Growth Summit.
He urged Canada, the fourth largest oil producer in the world, to find new destinations for its production, adding that other countries seeking new energy trade partners following the Iran war will likely see it as an “obvious” choice.
If supply disruptions from the war continue, the IEA is ready to release additional barrels of oil from its strategic reserves, he said. So far they have released 20% of available oil reserves in a bid to mitigate rising prices.
Reporting by Wa Lone in Toronto, Canada and Shariq Khan in New York; Writing by Liz Hampton; Editing by Chris Reese and Nick Zieminski
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