Official at IEA: Red Sea attacks harm oil product markets in Europe

Keisuke Sadamori, Director of Energy Markets and Security at the International Energy Agency, said on Wednesday that delays in delivering oil products due to ships rerouting to avoid attacks in the Red Sea particularly affect European product markets.

Sadamori added in statements to Reuters on the sidelines of the energy week in India's state of Goa, "We are currently witnessing a difficult situation regarding the Red Sea and the Suez Canal," noting a delay in various oil product delivery operations.

The Houthis, aligned with Iran, have been targeting commercial ships in the Red Sea with drones and missiles since mid-November, describing them as acts of solidarity with Palestinians against Israel in the ongoing conflict in Gaza.

Despite the delay and concerns about escalating tensions in the Middle East, global oil prices have declined, and Brent crude traded below $80 a barrel this week.

Sadamori said, "The markets are relatively stable thanks to the supply."

He added, "Increased supplies from outside the OPEC+ group, most notably from the United States, Brazil, and Guyana, and the demand growth is not very strong due to concerns about the overall economy."

Sadamori pointed out that he does not expect Saudi Arabia's decision to halt plans to increase its sustainable maximum capacity from 12 million barrels per day to 13 million barrels per day to impact global oil markets immediately in the short term.

He said that the current production cuts by Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies have increased available surplus oil capacity globally.

Reuters