IEA chief says agency is weighing whether to further tap reserves with market's loss of oil set to double in April

By Nora Redmond

International Energy Agency member countries in March agreed to release about 20% of their total stockpile.

The International Energy Agency is currently assessing whether tapping reserves of oil further is needed to soften the blow from spiking prices.

Last month, all 32 member countries of the IEA agreed to make 400 million barrels of oil from the emergency stockpile available - or roughly 20% of the overall IEA supply. The decision marked the sixth release in the group's history and the largest one ever.

"April will be much worse than March," Fatih Birol, the executive director of the IEA, said on an episode of Norges Bank Investment Management CEO Nicolai Tangen's podcast. He explained that many shipments of oil and gas had already left the Persian Gulf before the war started at the end of February, meaning there were supplies available in March.

"But in April there is nothing," Birol said. "The loss of oil in April will be twice the loss of oil in March."

Asked whether the IEA might recommend releasing more barrels from its reserves, Birol said, "we are assessing the market on a daily, if not hourly, basis, 24/7."

If there is a need for more oil, the agency will intervene and make a suggestion to governments, he said. "The biggest problem today is the lack of jet fuel and diesel ... and we are seeing it already in Asia," Birol said, adding that this will probably become a challenge in Europe by May.

Birol said that the IEA's agreed release of oil would not be sufficient to tackle current constraints.

'We have [also] suggested to many governments to take some demand-side measures.'Fatih Birol, International Energy Agency

"We have suggested to many governments to take some demand-side measures," he said. Birol said recommendations from the agency to member countries have included encouragement of working from home, reducing speed limits for cars and providing financial support to vulnerable people.

Brent crude (BRN00), the international benchmark, saw its biggest monthly rise in decades last month, racking up a gain of 63%, as investors have become increasingly concerned about the impact a prolonged conflict in the Middle East will have on global oil supplies.

While transit through the Strait of Hormuz picked up at the end of March, with slightly more than 25 ships passing through by the month's end, it remained firmly below the average last year of 1,100 ships, strategists at BCA Research, led by Felix-Antoine Vezina-Poirier, wrote in a note on Wednesday.

Birol told Tangen that the liquefied-natural-gas market has also faced significant disruptions, with Bloomberg reporting that exports have declined to a six-month low because of the conflict that began on Feb. 28 when Israel and the U.S. attacked Iran.

"It will come through the inflation, and then I think it will cut the economic growth in many countries, and especially in emerging and developing countries, where they don't have the hard currencies," he said.

-Nora Redmond

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