<div id="readability-page-1"><div id="parent_top_div"><p>Plans for the largest oil reserves distribution in history, announced Wednesday by the International Energy Agency, may prove to be a bridge from a very unbalanced oil market to one that is less so, and it will be a limited solution if the Strait of Hormuz remains closed, according to S&amp;P Global Energy.</p> <p>  &#34;The plan to release 400 million barrels, including 172 million barrels from the United States, will help the market adjust to the current imbalance. However, it remains to be seen how the release will support the markets that need it most, particularly Asian markets,&#34; the research firm said in a report. It will take months for the 400 million barrels to match the 430 million barrel reduction in global supply in the month of March alone.</p> <p>  “There is too much oil that cannot be exported via the Strait of Hormuz and not enough in Asia where stocks are running down. The market is seriously unbalanced and that will continue until the Strait is reopened and upstream and downstream operations return to normal. It will not happen quickly,” said Jim Burkhard, Vice President and Global Head of Crude Oil Research, S&amp;P Global Energy.</p> <p>  The 17 million barrels per day (mbpd) reduction in crude oil and refined product supply available to the market from March 1–11 represents the largest oil supply disruption in history and no other historical episode comes close. &#34;S&amp;P Global Energy estimates around 3 to 4 mbpd of oil was exported in the first 11 days of March via routes that bypass the Strait of Hormuz. By contrast, 21 mbpd of oil exports transited the Strait before the war,&#34; it said.</p> <p>  S&amp;P Global also said that more oil will come from routes that bypass the Strait. Saudi Arabia’s export facility at Yanbu on the Red Sea has an export capacity of 5 million b/d. The United Arab Emirates’ Fujairah terminal, which lies outside the Strait of Hormuz, can export as much as 1.8 million b/d. However, exports from southern Iraq, Kuwait, Bahrain and Qatar will remain negligible until the Strait of Hormuz reopens. &#34;While transportation (the ability for tankers to traverse the Strait of Hormuz) was initially the source of the disruption, concerns continue to grow about the underlying oil production itself,&#34; the report said.</p> <p>  Up to 6 to 7 mbpd of Gulf crude oil production capacity may be shut in, though the overall number remains in flux. Iraq has shut in at least 2 mbpd of production due to storage constraints. Kuwait has shut in some production and others are shutting in production due to security or storage concerns—or both.</p> <p>“Re-starting field production of this scale will be a massive technical exercise. Depending on the reservoir and how long it is shut in, it could take weeks, months or more to fully restore output. There is a similar concern on the downstream side as large refineries in the Gulf have stopped or curtailed operations,” said Jim Burkhard, Vice President and Global Head of Crude Oil Research, S&amp;P Global Energy.</p> </div></div>

<p>S&P Global Energy states that the International Energy Agency's plan to release 400 million barrels of oil, including 172 million from the U.S., is a limited solution to the current oil market imbalance, especially if the Strait of Hormuz remains closed. The report highlights that the release will take months to address the 430 million barrel reduction in global supply in March. The market remains unbalanced, with too much oil unable to be exported and insufficient supply in Asia. The ongoing disruptions and potential production shut-ins further complicate the situation.</p>

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Historic release of strategic oil reserves a limited solution, says S&P