The International Energy Agency (IEA) has warned that oil markets will enter the “red zone” by July and August, threatening summer travel plans as global stocks dwindle and Middle Eastern exports remain disrupted. Fatih Birol, the IEA’s executive director, told a London thinktank that surging demand, low reserves and reduced supply from the region could cause a severe crunch during the holiday season.
Birol said the current crisis was more dramatic than previous oil shocks in 1973, 1979 and 2022, with 14 million barrels per day missing from the market. He urged a full reopening of the Strait of Hormuz and said IEA members could release more strategic reserves, noting that 80% of collective stocks remain untapped. He also warned that extremist parties in Europe might exploit rising inflation to undermine political systems.
Diplomatic efforts to resolve the Iran-US standoff have hit difficulties, with Pakistan’s interior minister still in Tehran after claims of a breakthrough. Iran’s Supreme Leader has reaffirmed that the country will not export its enriched uranium stockpile, though it could be downblended under UN supervision. Meanwhile, former President Donald Trump made conflicting statements, downplaying the need for the material but insisting the US would eventually secure it.
Birol predicted that the reputation of the Middle East as a secure energy supplier has been damaged, and governments will pay a premium for secure sources and renewable energy. He expects countries to review energy strategies, turning to renewables, nuclear and domestic production where economically viable.
