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Agadir – Global oil prices have not reached a level that would trigger demand destruction, US Energy Secretary Chris Wright said on Monday at the CERAWeek energy conference.
Prices have not reached a stage where oil demand destruction is a possibility, despite being at a price of almost $100 per barrel and in spite of the deepening volatility in the wake of the Iran war, Wright suggested.
Reports indicate that the escalating US-Israeli-led war on Iran has caused one of the most critical disruptions in the history of energy supply, with the closure of major shipping routes and repeated strikes on energy infrastructure in the Gulf region sending unprecedented shockwaves in the global market.
Read also: Trump Pauses Strikes on Iranian Energy Sites for Five Day Period
In response, Reuters reported on Monday that the Trump administration is taking measures to stabilize markets, including a coordinated release of oil from the US Strategic Petroleum Reserve with other members of the International Energy Agency.
As part of these measures, Wright elaborated, the US is releasing “between a million and a million-and-a-half barrels per day of oil, eventually getting to 3 million bpd.”
The US energy tsar’s tepid reassurance comes the same day the Executive Director of the International Energy Agency (IEA) warned that the world is now facing the biggest global energy crisis.
According to the IEA director, the current situation is a far more severe energy crisis than the oil shocks of the 1970s and Russia-Ukraine war fallout combined.
Oil markets have remained highly sensitive to geopolitical developments, with prices reacting sharply to shifts in the conflict.
Prices fell sharply on Monday after U.S. President Donald Trump announced a pause in military strikes on Iran’s energy infrastructure, with the move prompting a wide-ranging market reaction.
Brent crude dropped by more than 10% settling just below the $100 per barrel mark, while US crude also lost more than 10% and recorded its lowest level in nearly two weeks.
The decline was the biggest one-day drop in oil prices since earlier in March when Trump said that the conflict with Iran may be nearing an end.
