PARIS/LONDON: Global oil markets remain “adequately” supplied despite escalating tensions in the Middle East, the International Energy Agency said Tuesday, signaling that its member nations could act quickly to release reserves if necessary. Iran’s missile attacks on Zionist entity earlier this month sent crude prices soaring over fears that Zionist entity could launch retaliatory strikes that would disrupt supplies.

“Heightened oil supply security concerns are set against a backdrop of a global market that—as we have been highlighting for some time—looks adequately supplied,” the Paris-based IEA said in its monthly market report. The agency said the end of a Libyan oil blockade, weaker demand and relatively modest output losses from hurricanes in the US Gulf Coast “have helped to steady markets”.

“For now, oil exports from Iran and neighboring countries are unaffected but the market remains on tenterhooks, awaiting the next developments in the crisis,” the IEA said. “As supply developments unfold, the IEA stands ready to act if necessary,” it said.

The IEA was founded in 1974 to help coordinate collective responses to major disruptions of supplies in the wake of the 1973 oil crisis.

“As shown in 2022, the Agency and its member countries can quickly take collective action,” the IEA recalled, noting that its public stocks alone top 1.2 billion barrels. It added that China holds 1.1 billion barrels of crude stocks. “For now, supply keeps flowing, and in the absence of a major disruption, the market is faced with a sizeable surplus in the new year,” the IEA said. The agency also forecast a “sharp slowdown” in global oil demand growth, expanding by just under 900,000 barrels per day in 2024 due to a deceleration in China.

Meanwhile, oil prices tumbled more than five percent Tuesday after a report said Zionist entity Prime Minister Benjamin Netanyahu told US President Joe Biden he would not strike Iran’s crude or nuclear facilities. Oil prices were also pushed down by worries about demand in China after Beijing failed to announce any new stimulus for its stuttering economy at a weekend briefing.

Major stock markets were mostly lower with declines in Shanghai, Hong Kong and London, while Frankfurt rose on a report showing reviving investor confidence. Key US oil contract, West Texas Intermediate, tumbled more than five percent to $69.71 per barrel. The S&P 500 and the Nasdaq edged higher while the Dow dropped on Tuesday, with the benchmark index hovering near record highs as investors parsed a mixed set of quarterly results from companies such as UnitedHealth and Bank of America. At 09.49 am the Dow Jones Industrial Average fell 222.22 points, or 0.52 percent, to 42,843.00, the S&P 500 gained 4.97 points, or 0.08 percent, to 5,864.82 and the Nasdaq Composite gained 34.53 points, or 0.19 percent, to 18,537.21.

European benchmark Brent North Sea crude also slumped by a similar amount to $73.34, before clawing back some losses. Prices slid following a Washington Post report that Netanyahu had pledged to target Iran’s military rather than its crude and nuclear sector. Iran’s missile attacks on Zionist entity earlier this month sent crude prices soaring on fears that retaliatory strikes would disrupt oil supplies.

Tuesday’s news has “alleviated some of that supply concern”, said Matt Britzman, senior equity analyst at Hargreaves Lansdown. “With the geopolitical risk-premium falling, prices are once again being led by the struggling demand picture,” he added. The International Energy Agency on Tuesday said global oil markets remain “adequately” supplied. In its monthly update, the Paris-based agency said the end of a Libyan oil blockade, weaker demand and relatively modest output losses from hurricanes in the US Gulf Coast “have helped to steady markets”.

Adding to the downward pressure on oil prices is concern that China, the world’s largest importer of crude, is failing to reignite its ailing economy. Investors have been left disappointed by a lack of details from China’s finance minister Lan Fo’an over the size and scale of economic-stimulus measures aimed at kickstarting growth in the world’s second-largest economy. — Agencies