ALBAWABA - Long-term disruptions in the delivery of oil continue to stress international markets, and growing fears over the world’s energy supply are driving renewed diplomatic attempts between Washington and Tehran.
A article in *The New York Times* says that the pressure on policymakers to find a solution that may stabilize energy markets and reduce supply shortages has risen with dwindling oil supplies around the world and ongoing limitations on shipping through the Strait of Hormuz.
Strategic fuel reserves kept by governments and energy companies have helped to buffer the impact of supply disruptions from the conflict involving Iran, but analysts warn these emergency supplies are slowly running down.
U.S. strategic petroleum reserves are at some of the lowest levels seen in decades, the research said, and countries that depend significantly on imported oil such as Japan and South Korea have also tapped down reserves to sustain supplies.
The renewed diplomatic focus comes after recent comments by U.S. President Donald Trump, who recently suggested Washington and Tehran were nearing a potential deal. Markets welcomed the notion of a breakthrough, with oil prices dropping below the $90-per-barrel barrier.
But it is unclear if any future deal would entail specific actions to increase oil shipments, restore critical shipping routes, or solve the broader supply disruptions hurting global markets.
A long blockade of the Strait of Hormuz could expose worldwide oil markets to rising vulnerability by cutting the world’s capacity to absorb future supply shocks, energy experts say.
Meanwhile, Iran has reportedly stockpiled millions of barrels of unsold oil, waiting for conditions that would let it to more freely begin exports, while the United States has continued to tap strategic reserves and ramp up supplies to meet global demand.
Falling reserves, volatile markets and concerns about prolonged supply interruptions have given both Washington and Tehran greater economic incentives to seek a diplomatic breakthrough, analysts say.
Global energy markets are watching intently if a potential deal may help restore peace to one of the world’s most vital oil-producing regions, as talks continue.
