Is there enough world slack capacity to compensate for stopped Strait of Hormuz throughput?
Yes, the International Energy Agency (IEA) requires that each member country maintain stockpiles of oil to account for ninety days of import consumption (either through government control or mandate). Based on government estimates, globally reported public and private oil stockpiles stood at nearly 4.2 billion barrels as of July 2007, including the 700 million barrel U.S. Strategic Petroleum Reserve (SPR). If the Strait was partially blocked, resulting in a stoppage of almost 9 million barrels per day, in theory there is certainly enough in public stockpiles to make up for this loss. However, the U.S. SPR, by far the largest single stockpile, can only release a maximum of 4.4 million barrels per day. Furthermore, because there is very little historical precedent in actually using the SPR or initiating a “coordinated” drawdown of oil among the IEA-participating countries, it is unclear how useful these vast stockpiles would be in the event of a Strait closure.
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