OPEC calls for IEA restraint on stock releases as members monitor Israel-Iran risks

OPEC Secretary General Haitham al-Ghais has accused the International Energy Agency of raising "false alarms" amid Israeli attacks on Iranian nuclear facilities, after the agency's chief hinted at potentially releasing emergency oil stocks.

In a statement, Ghais said there were "currently no developments in supply or market dynamics that warrant unnecessary measures" and accused IEA Executive Director Fatih Birol of projecting "a sense of market fear through repeating the unnecessary need to potentially use oil emergency stocks."

In a statement earlier in the day, Birol said the IEA was "monitoring" the impact of Israeli strikes, but was "ready to act if needed" with its "over 1.2 billion barrels of emergency stocks."

Previous such statements, including after Russia invaded Ukraine in 2022, "contributed to higher market volatility and led to premature stock releases that ultimately proved unnecessary," Ghais added.

The secretary general's remarks came as OPEC+ officials were closely monitoring the escalating military confrontation between Israel and Iran -- one of their own member states -- with market volatility and fears of supply disruptions in the Middle East prompting concerns within the alliance, according to sources and analysts.

They follow years of bickering between OPEC and the the IEA, which represents largely wealthy oil-consuming countries.

OPEC has long accused the Paris-based agency of jeopardizing vital oil investment through bearish demand forecasts and warnings about peak oil.

Supply disruptions

Despite Ghais' calls for calm, the Israeli attacks and associated volatility pose a challenge for OPEC+, which casts its mission as providing stability and predictability to the oil market.

Some OPEC+ members could be impacted directly in the event of supply disruptions through the Strait of Hormuz, with the UAE, Saudi Arabia, Kuwait, Iran, Iraq and others all shipping crude through the chokepoint to international markets, analysts said.

"The most immediate and pressing concern for OPEC would be the potential for disruptions to production and transit in the Middle East," said Payam Hashempour, an analyst with S&P Global Commodity Insights. "Any conflict that impacts output, shipping lanes like the Strait of Hormuz, or key infrastructure would directly affect global supply, which is OPEC's primary concern."

He added that "a major conflict could impact internal relationships within OPEC, making it harder to reach agreements on production policies."

"It is very worrying," said one OPEC+ delegate of the military escalation, while noting the immediate impact on crude prices.

The source added that it was "political matter" but that monitoring the situation was "mandatory" for the alliance.

Another delegate said they were unable to comment due to the "complexity" of the situation.

OPEC+ ministers have the ability to organize emergency meetings with little notice.

Price spike

Strikes on Iranian nuclear facilities and some cities continued June 13 after beginning in the early hours of the morning, according to reports. Meanwhile, US President Donald Trump wrote on his Truth Social platform that further, "even more brutal" attacks could come should Iran fail to strike a deal with the US.

Key OPEC producers, including Saudi Arabia and Iraq, which lies between Israel and Iran, condemned the Israeli strikes, with the world's largest oil exporter describing Tehran as a "sisterly" nation.

Saudi foreign minister Prince Faisal bin Farhan al Saud also had a call with his Iranian counterpart on June 13, the ministry said, in which he denounced "blatant Israeli aggression."

Oil facilities, refineries and ports were not affected as of June 13, Iranian officials said.

Nevertheless, the attacks -- viewed by analysts as the biggest military escalation between the two Middle Eastern countries in decades -- initially caused a $9/b spike in the front-month ICE Brent crude futures contract amid fears of a full-blown war that could hit regional supply.

By 1334 GMT, prices had settled at $74.17/b, a roughly 7% increase on the previous close.

OPEC+ ministers often stress the depoliticized nature of policy discussions, while analysts note that OPEC's days of oil embargoes -- including against Israel and its allies in 1973 during the Yom Kippur War -- are long gone.

Today, OPEC+ members Azerbaijan, Kazakhstan, Russia and Gabon are Israel's biggest crude suppliers.

The alliance produces roughly 40% of the world's crude and is the only actor in a position to regulate oil supply, according to analysts.

The OPEC secretariat in Vienna did not respond to requests for comment.

Supply policy

The simmering conflict comes as eight OPEC+ producers are rapidly returning 2.2 million b/d of crude to the market in a bid to claw back market share, which has put a ceiling on prices in recent months alongside US tariffs.

"I do not think this has any bearing on their supply policy formulation," said Harry Tchiliguirian, group head of research at Onyx Capital Advisory, of the step towards a conflict between Israel and Iran.

"I think we will get further unwinds of voluntary cuts in the future as the producer group has shifted away from a price defense strategy to a market share one."

Iran pumped 3.24 million b/d of crude in May, according to the latest Platts OPEC+ Survey from S&P Global Commodity Insights. Just over half of its production is exported, mostly to China.

Like Libya and Venezuela, the country is not currently subject to an OPEC production quota due to US sanctions.