In The Spotlight
Fatih Birol, IEA executive director. (Image source: IEA)
IEA Member countries to release emergency reserves
The 32 Member countries of the International Energy Agency have agreed to make 400 million barrels of oil from their emergency reserves available to the market, the largest release of emergency oil stocks in the Agency’s history, to address the loss of supply stemming from the war in the Middle East and the effective closure of the Strait of Hormuz
In a statement, IEA executive director Fatih Birol noted that the conflict in the Middle East is having a significant impact on global oil and gas markets, with major implications for security, affordability and the global economy.
The conflict in the Middle East that began on 28 February 2026 has impeded oil flows through the Strait of Hormuz, with export volumes of crude and refined products currently at less than 10% of pre-conflict levels. Without sufficient routes to market and without sufficient storage, regional operators have been forced to shut in or curtail a substantial amount of production. They are also experiencing attacks on their energy and energy-related infrastructure.
An average of 20 million barrels per day of crude oil and oil products transited the Strait of Hormuz in 2025, or around 25% of the world’s seaborne oil trade. Options for oil flows to bypass the Strait of Hormuz are limited.
Refinery operations are also being disrupted, with implications for the jet fuel and diesel supplies.
“The situation of the natural gas markets is challenging, with few options to replace LNG cargoes from Qatar and the UAE. These have been reduced by 20%, leaving balances even tighter than for oil,” Birol remarked. Asia has been the most profoundly affected, and is forced to compete with other markets for LNG cargos.
“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size,” said Birol. “Oil markets are global, so the response to major disruptions needs to be global too. Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together.”
While this will alleviate the immediate disruption, the most important thing is to stabilise flows and allow traffic to resume through the Strait of Hormuz, he said.
The emergency stocks will be made available to the market over a timeframe that is appropriate to the national circumstances of each Member country and will be supplemented by additional emergency measures by some countries.
IEA members hold emergency stockpiles of over 1.2 billion barrels, with a further 600 million barrels of industry stocks held under government obligation. The coordinated stock release is the sixth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005, 2011, and twice in 2022.
The IEA Secretariat will provide further details of how this collective action will be implemented in due course. It will also continue to closely monitor global oil and gas markets and to provide recommendations to Member governments, as needed.
“The IEA will continue its mission of upholding energy security, as we have done today for the oil markets, and will continue to do across the entire energy sector,” Birol concluded.
Brent and WTI prices pushed past US$115 a barrel on 9 March 2026. (Image source: GlobalData)
Oil markets remain acutely sensitive to Gulf developments: GlobalData
As Brent and WTI prices pushed past US$115 a barrel on 9 March 2026, the world was in for a major supply shock
“The latest price spike indicates that the market is rapidly transitioning from pricing in a logistics disruption to factoring in a potential supply shock. Initially, traders reacted to maritime risks in the Strait of Hormuz, which raised shipping costs and delayed cargoes. However, recent developments suggest that actual production and export volumes across key Gulf producers are now at risk, fundamentally tightening global supply expectations," said Jaison Davis, economic research analyst at GlobalData, an intelligence and productivity platform.
He went on to explain how the sharp price rise exposed the market’s spare capacity buffer. "Even relatively small disruptions to Gulf production can trigger outsized price movements because the region accounts for a disproportionate share of globally traded crude," Davis said.
“The current surge in prices also reflects the concentration risk within the global oil system. A large share of exports from Saudi Arabia, Iraq, Kuwait, and the UAE passes through the Strait of Hormuz, leaving global energy supply exposed to geopolitical disruptions in a single maritime corridor. Financial markets have already begun pricing in the broader macroeconomic consequences of the oil shock, including rising inflation expectations, currency volatility, and pressure on equity markets across energy-importing economies," he said.
Duration remains the most influential determining factor at this point. While prices may find balance if stability is restored in the Strait of Hormuz, it can easily lead to a structural supply deficit situation if there's no end in sight for the conflict.
“At the same time, should GCC states, along with Turkey, manage to influence the US and international diplomatic channels toward de-escalation, markets may begin to unwind some of the current geopolitical risk premiums. Tanker flows through the Strait of Hormuz could stabilise, insurance and freight costs could moderate, and production cuts could be reversed, gradually pushing oil prices closer to pre-crisis levels. Residual volatility would likely persist, but a credible ceasefire or mediation effort could alleviate worst-case supply fears and ease pressure on energy-importing economies.
"Nonetheless, oil markets will remain acutely sensitive to developments in the Gulf region. Pricing dynamics are increasingly shaped by security conditions and the resilience of export routes through the Strait of Hormuz. Even with short-term stabilisation in shipping, any lingering disruption to production, infrastructure, or tanker traffic risks sustaining elevated volatility, as well as renewed inflationary pressures for oil-importing countries,” said Davis.
New developments have driven oil prices sharply higher
Gulf energy giants declare force majeure amid Middle East conflict
A wave of force majeure declarations has swept through the Middle East's energy sector this month as the ongoing US-Israel war with Iran disrupts production, shipping, and exports across the Gulf region, writes Sania Aziz.
The declarations, which relieve companies from contractual obligations due to unforeseen events beyond their control, stem from Iranian retaliatory attacks on facilities, threats to maritime routes, and the near-total blockage of the Strait of Hormuz, which is a vital chokepoint for one-fifth of global oil supplies.
QatarEnergy, the world's largest liquefied natural gas (LNG) exporter, was among the first to act. On 4 March, the state-owned firm declared force majeure on LNG shipments after halting production at key facilities in Ras Laffan and Mesaieed following Iranian drone strikes.
The company cited attacks on its infrastructure and the inability to operate safely, with sources indicating restarts could take weeks or longer to avoid equipment damage.
Qatar supplies around 20% of global LNG, and the move has sent shockwaves through Asian and European markets reliant on these deliveries.
Kuwait Petroleum Corporation (KPC) followed suit on 7 March, declaring force majeure on crude oil and product exports while slashing output.
The decision was prompted by explicit Iranian threats to shipping safety in the Strait of Hormuz, ongoing regional attacks, and a severe shortage of available vessels in the Gulf.
KPC, a major naphtha and jet fuel supplier to Asia and Europe, cited these factors as making normal operations impossible.
Bahrain's Bapco Energies joined the list today, 9 March, announcing force majeure on group operations after an Iranian strike set its Sitra refinery ablaze, which is the kingdom's sole refining complex.
The company assured that domestic supplies remain secure under contingency plans, but exports and broader activities are severely impacted by the conflict.
Aluminium Bahrain (Alba), operator of one of the region's largest smelters, declared force majeure earlier in March on shipments.
Unlike others, Alba stressed that its facilities remain undamaged; the issue lies solely in halted shipping through the Strait of Hormuz, preventing outbound metal deliveries despite continued production.
The ripple effects extend beyond Gulf producers. China's Wanhua Chemical declared force majeure on for supplies to Middle East customers, blaming severe regional shipping disruptions.
These developments have driven oil prices sharply higher and raised fears of prolonged supply shortages.
Analysts warn that further escalations could prompt additional declarations from Saudi Arabia, the UAE, and others as storage fills and export routes remain blocked.
The situation remains fluid, with global energy markets on high alert.
The acoustic MP-FWI imaging implementation has demonstrated significant uplifts. (Image source: DUG)
The end of seismic processing as we know it
Technological advancements in geoscience are often incremental—small steps that help refine our ability to understand the subsurface. But occasionally, we witness a genuine leap. DUG Technology’s Chief Geophysicist, Tom Rayment, considers the impact of elastic MP-FWI imaging and asks, "Is traditional seismic processing finally a thing of the past?"
For the past century, seismic data has been an invaluable tool for detecting hydrocarbons. Although methods have become more sophisticated, the fundamental workflow for turning acquired data into interpretable products largely remains the same. The advent of elastic multi-parameter full waveform inversion (MP-FWI) imaging represents a significant shift away from the traditional approach.
The acoustic MP-FWI imaging implementation has demonstrated significant uplifts without needing conventional time-processing, model-building, or depth-migration techniques. Elastic MP-FWI imaging is a further step-change, also deriving rock properties and effectively rendering the amplitude variation with angle (AVA) inversion workflow redundant. The approach will soon make conventional workflows obsolete, if it hasn't already.
Despite this monumental leap, the technology is still young, with ample room for more progress. Most FWI implementations use a single component of the acquired data (hydrophone for marine, vertical geophone/accelerometer for land). However, additional components offer complementary information that can further constrain results. Recent developments show that two-component towed streamer and ocean-bottom seismic MP-FWI imaging can further improve results and accelerate convergence.
The logical next step is to include horizontal components. Shear waves provide valuable subsurface information, especially in areas of strong P-wave absorption like gas bodies. Recent DUG projects are already demonstrating that the benefits of converted-wave processing can be realised with elastic MP-FWI imaging. Furthermore, on land, exploiting shear waves in the form of ground roll is now viable. What was once noise is now a useful signal, inverted via elastic FWI to provide high-resolution shear-wave-velocity models. Capturing near-surface complexity is crucial for successfully illuminating deeper targets.
Another benefit is the seamless integration of expertise. Processing, imaging, and quantitative interpretation geophysicists can now work simultaneously on a project, abandoning the siloed conventional workflows. Closer collaboration fosters better understanding, which translates to optimal results. This will soon extend beyond AVA inversion into reservoir characterisation and modelling. Elastic MP-FWI imaging will produce a suite of outputs, providing a rich model space for reservoir engineers to make probabilistic predictions that honour both seismic and well data.
This technological leap was first conceived by the FWI pioneers in the 1980s. Its reality today is thanks to the skills of research and development teams and modern high performance computing. This essential work continues in earnest at DUG; as the technology evolves, it will continue to extend what is possible with seismic data, ultimately allowing the industry to make better, faster decisions.
AD Ports Group remains fully operational.
AD Ports Group remains operational amid volatilities
AD Ports Group has reported continuation of all operations across its clusters without any disruption given current regional developments
The Group has already taken precautionay measure with the activation of its crisis management and business continuity protocols, as it remains in constant coordination with the authorities concerned in the UAE to safeguard its workforce, partners and stakeholders.
All UAE ports and terminals managed and operated by the Group’s Ports Cluster, in addition to related services remain fully operational.
While inaccessibility of the Strait of Hormuz will affect vessel calls at Khalifa Port, services at the port will go on uninterrupted. Closure of the Strait of Homruz will be compensated by increased volumes from the Group's diversified global maritime network, as it shifts trading routes.
Across the Group’s Maritime & Shipping Cluster, the majority of its 122 shipping vessels including container, bulk, Ro-Ro, and multipurpose vessels are operating outside the Strait of Hormuz. Those currently within the Strait continue to operate intra-Gulf services. Overall, the impact on the Maritime & Shipping Cluster is expected to be limited. The Group’s Economic Cities & Free Zones and Logistics Clusters are likewise expected to experience limited impact.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO of AD Ports Group, said: “Global trade has historically demonstrated resilience during periods of geopolitical tension. Through disciplined execution, operational excellence and proactive risk management, AD Ports Group remains well positioned to support supply chain stability and uphold its commitments to customers across its global network, in line with vision with our wise leadership.’’
Oil is now a question of access, geography and timing.
Oil’s new reality: It’s not about supply, it’s about access
The oil market is no longer asking how much crude is being produced. It is asking who gets it, and when
Over the past week, attention has focused on the number of strikes across ports, refineries, power plants and LNG facilities in the Gulf. Depending on assumptions, the direct loss of wellhead, pipeline and refinery liquids to market may already exceed 1 million barrels per day. That figure alone is significant. But it remains secondary to the larger question hanging over the Strait of Hormuz.
Even if Hormuz begins to flow again in something close to normal volumes, the region’s infrastructure is clearly vulnerable. The market is now being forced to price not just a temporary blockage, but the risk of ongoing disruption to oil and gas facilities. Each passing hour of uncertainty adds incremental supply chain strain, and Brent has begun to reflect that reality.
There are various scenarios between full closure and full normalisation. Even a return to 75% of normal transit would present a severe logistical challenge. Insurance costs, naval escorts and rerouting all reduce effective supply. Freight markets are already reacting accordingly. Prompt tanker rates are surging, sharply raising landed crude procurement costs.
In this environment, traditional pricing logic begins to break down. The landed price of crude grades becomes less relevant when freight cannot be reliably fixed and spot premiums are difficult to establish. The market shifts from price optimisation to access management.
The West is relatively long crude and less dependent on Arabian Gulf supply than the East. It also holds freight advantages. Asia, by contrast, is more exposed to Gulf flows. As a result, refining runs in Asia are more at risk than in Europe or the United States. That divergence is already appearing in product markets via East-West spreads.
Brent-Dubai spreads may widen further regardless of freight direction. There is effectively no competition for the marginal Western barrel into Asia if Gulf supplies are constrained. In that context, Dubai-linked pricing can tighten independently of freight economics, while Brent can move in ways that do not necessarily align with historical arbitrage logic.
Freight costs themselves are becoming a direct transmission mechanism. Aframax rates to Europe imply roughly $9 per barrel to move WTI into the Atlantic Basin, pushing prompt WTI-Brent spreads wider. VLCC routes to Asia are similarly expensive. Yet benchmark differentials do not always adjust cleanly to reflect this because physical flows are constrained by risk, not simply by economics.
The longer the stand-off persists, the more structural these shifts become. Refiners must make procurement decisions based on security of supply rather than margin optimisation. Strategic reserves in the US, Europe, China, Japan and South Korea provide buffers measured in months, but releasing stocks is a policy decision. Governments may choose to loan or auction volumes to smooth disruption, but those tools are not immediate substitutes for steady Gulf exports.
Infrastructure risk now extends beyond crude production. There are concerns around storage capacity, with reports suggesting some export terminals may face tank-top pressures if flows remain restricted. Ullage becomes part of the conversation. Even if Hormuz reopens, infrastructure security will remain in question for some time.
Products will increasingly act as the demand-adjustment valve. Refining margins may need to rise to justify higher crude procurement costs and ensure available barrels flow eastward. Natural gas pricing is already signalling potential substitution toward fuel oil and crude in power generation where possible.
For now, the market’s priority is evidence that Hormuz can move safely and consistently, including clarity on insurance and escort arrangements. Without that, prices will continue to reflect supply chain risk rather than just supply loss.
This is no longer simply a production story. It is a logistics and allocation story. In a fragmented and risk-sensitive market, oil does not disappear evenly. It becomes a question of access, geography and timing. And that is where volatility truly begins.
The writer of the article is Neil Crosby, AVP Oil Analytics at Sparta
Location of Ras Tanura
Minor fire at Ras Tanura refinery after drone debris
An official source at Saudi Arabia’s Ministry of Energy has confirmed that the Ras Tanura oil refinery sustained limited damage on Monday morning after debris from intercepted drones fell in its vicinity.
According to the Saudi Press Agency, the incident occurred at approximately 7:04 AM local time when two drones were intercepted near the facility. Falling fragments reportedly caused a small fire within the refinery complex.
Emergency response teams acted swiftly to contain the blaze, preventing any escalation. Authorities said the fire was brought under control in a short period of time, and no injuries or fatalities were recorded as a result of the incident.
As a precaution, certain operational units at the refinery were temporarily shut down while safety checks were carried out. Officials stressed that the measures were taken to ensure the continued protection of personnel and infrastructure.
Despite the disruption, the Ministry of Energy confirmed that the incident has not affected the supply of petroleum products to domestic markets. Fuel deliveries and distribution channels are continuing as normal, with contingency protocols ensuring stability in local supply chains.
Ras Tanura is one of the Kingdom’s key refining hubs, playing a central role in processing and distributing petroleum products. While the reported damage was described as limited, the event underscores the importance of protective and rapid-response measures at critical energy infrastructure sites.
Authorities have not released further details regarding the origin of the drones or the broader security context surrounding the interception. However, officials reiterated that safeguarding energy facilities remains a top priority, with emergency and security teams maintaining heightened vigilance.
The situation remains under monitoring, with the Ministry indicating that updates will be provided if necessary.