LONDON (Reuters) - Record oil and refined products stocks will cushion potential shortages caused by Hurricane Harvey, the International Energy Agency (IEA) said on Tuesday, adding that it could release emergency oil stocks in the event of extended outages.
Some crude production and about 2 million barrels per day (bpd) of refining capacity has been shuttered as Harvey has battered Texas, causing at least eight deaths and catastrophic flooding.
Though the IEA said on Monday that it still saw no need for a release of emergency stocks, the head of the global energy watchdog’s Oil Markets Division says the organisation is monitoring the situation closely.
“If there is a continued shortfall of fuels we will act,” the IEA’s Neil Atkinson told Reuters on Tuesday.
The IEA and the U.S. Department of Energy continue to assess the damage but it is too early to say what action, if any, would be needed, Atkinson said.
“These are very early days. We know of refinery shutdowns and (crude oil) production that has come down. What we don’t know is how long these closures will be,” he said.
Record inventories, however, are expected to buffer any supply shortfalls.
Current U.S. commercial stocks stand at about 1.3 billion barrels, including 450 million barrels of crude, the IEA says. That excludes strategic petroleum reserves (SPR).
The United States consumes about 20 million barrels of oil per day, nearly half of which is for gasoline.
“Fuel stocks are very high at the moment so the issue is whether you can move fuels around and if trucks and pipelines can operate,” Atkinson said.
The Paris-based intergovernmental agency coordinates emergency fuel releases when natural disasters or war interrupt global energy supplies.
Refineries in the Gulf Coast area, which is also a major export hub to other U.S regions as well as Latin America and Europe, took months to recover from previous hurricanes. It took 18 weeks to repair refineries and restore production fully after Katrina struck New Orleans in August 2005, Atkinson said.
IEA members agreed collectively to release 60 million barrels into the market in the weeks following Katrina.
Three years later, after Hurricane Gustav struck, it took 14 weeks before refining operations fully resumed.
This time, the recovery could take even longer because of Harvey’s unprecedented intensity and the extensive flooding.
Reporting by Ron Bousso and Dmitry Zhdannikov; Editing by David Goodman