STAVANGER: The global crude oil market is sufficiently supplied as output has adjusted to the loss of Iranian trade, and higher prices alone do not justify a release of strategic reserves, the head Of the International Energy Agency (IEA) said on Tuesday.
"We see that the loss of these Iranian barrels was long in the making, the market had time to adjust itself," IEA Executive Director Maria van der Hoeven told Reuters.
"Higher prices alone are not the trigger for IEA collective stock release and at this moment we see that the crude oil market is adequately supplied," she said in an interview.
Brent crude has been trading above $110 in recent weeks after falling below $90 in June, putting pressure on the IEA from some members, particularly the United States, to tap into emergency oil inventories to temper rising prices.
Some reports last week indicated that the release plan, supported primarily by the United States, Britain and France, was gaining traction but van der Hoeven's comments indicate the IEA remained firmly opposed.
"The Iranian sanctions didn't come out of the blue. The market has been adjusting relatively smoothly to lower Iranian supplies over the last nine months," van der Hoeven said.
"On the supply side there is a steep increase in production from other OPEC sources, like Saudi Arabia, and we also see a steep ramp-up in the United States and the Canada oil sands."
Regarding the potential impact of Tropical Storm Isaac, she said it was a domestic factor which may trigger a domestic response.
"It's a domestic point. What we've seen in the United States with a hurricane like that is if it has a domestic effect, then the United States more than once took its own measures."
She added that the supply increase was also met by lower-than-expected global demand as the world economy performed below expectations.
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