The global oil market does not face any emergency, the head of the International Energy Agency said on Tuesday, after crude breached $100 per barrel on unrest in Egypt. "It is not an emergency now," Nobuo Tanaka told Reuters.
"If a disruption happens, we should act," he added, referring to both the IEA and the oil producing group Opec. Even a closure of the Suez canal would only delay, rather than cut, oil supply, Tanaka said. Brent crude hit $100 per barrel for the first time since 2008 on fears instability could spread through the Middle East, which together with North Africa pumps over a third of the world's oil.
Opec says it holds about 6 million barrels per day (bpd) of idle production capacity - equal to 7 percent of world demand - that it could tap to fill any shortage. Most of this capacity is held by Saudi Arabia. Both Saudi Arabian Oil Minister Ali al-Naimi and Opec's Secretary-General Abdullah al-Badri signalled on Monday Opec had no plans to call a meeting before its next planned gathering in June as markets were well supplied.
The IEA and Opec have repeatedly differed about demand and production levels with Opec attacking the West for raising fuel taxes and then asking producers for more crude. The IEA has a mandate to ask its members, the OECD nations, to release oil stocks in the case of an emergency supply disruption. It also comments on the level of supply needed from top producers.
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