LONDON, March 26. /TASS/. Global oil production fell below the level during the COVID-19 pandemic because of the conflict in the Middle East and Hormuz Strait closing, Rystad Energy consultancy said in its report.
"Collectively, we estimate that production has fallen below Covid-19 troughs, with losses reaching a peak of 10.0 million barrels per day - a number that dwarfs anything the IEA release can offset on a sustained basis," the company noted.
"The oil market did not underreact to the disruption in the Strait of Hormuz; it absorbed it. For nearly four weeks, markets have shown remarkable resilience in the face of disruption, supported by a combination of pre-war surplus, crude-on-water, and policy barrels that provided a temporary buffer and kept prices contained," Chief Oil Analyst Paola Rodriguez-Masiu said. "That phase is now ending. With spare capacity largely trapped behind the Strait, and inventories already drawing down, the system has shifted from buffered to fragile," she stressed.
"The global oil system can no longer absorb shocks the way it could three weeks ago," Rystad Energy added.