On April 14, 2026, Fatih Birol, the executive director of the International Energy Agency (IEA), addressed attendees at the Semafor World Economy Summit during the IMF and World Bank Spring meetings in Washington, DC.
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Birol issued a warning that the oil market might soon face a critical situation, as global oil supplies diminish and demand spikes with the onset of the summer travel season.
He highlighted that the key to mitigating the energy shock caused by the conflict in Iran is the complete and unconditional reopening of the Strait of Hormuz, a crucial passage for oil transportation.
Birol cautioned that without reopening the Strait and with no additional oil entering the market from the Middle East, the depletion of global reserves combined with increased summer demand could push oil markets into a precarious “red zone” by July or August.
These remarks were made during a session at Chatham House, focusing on the crisis in the Strait of Hormuz and the broader implications for global energy security.
The IEA has previously said the global market is facing the most severe disruption in its history. That’s despite, Birol said, the market having benefitted from being in the “fortunate” position of entering the crisis with a surplus to help absorb the shock. These stocks, however, are now eroding, Birol said.
Typically, roughly 20% of the world’s oil and liquefied natural gas passes through the Strait of Hormuz, but shipping traffic has virtually halted since U.S. and Israeli-led strikes against Iran started on Feb. 28.
The IEA chief said the “biggest pain of this crisis will be felt in developing Asia and Africa,” adding that he was just as concerned about the impact of the Iran war on global food security as he was on energy security.
Birol warned it will likely take “a lot of time” for Middle East oil production and refining to return to pre-war levels, saying that the IEA stands “ready to act” to coordinate further strategic oil reserve releases if necessary.
In March, the global energy watchdog coordinated the release of 400 million barrels of oil from strategic reserves to address the supply disruption triggered by the Iran war. It marked the largest such action in the organization’s history.
‘Incredibly tough situation’
Lydia Rainforth, head of European equity strategy at Barclays, described the state of play as an “incredibly tough situation” for global oil markets.
“This is the largest supply outage that we’ve ever had. We’re now exceeding a billion barrels of lost production and that’s going to take a long time to … normalize, even if the Strait opens tomorrow,” Rainforth told CNBC’s Ben Boulos on Thursday.
Oil prices traded higher during afternoon deals in London as market participants closely monitored the outcome of U.S.-Iran talks.
International Brent crude futures traded 1.9% higher at $106.92 per barrel, reversing some of its losses in the previous session. U.S. West Texas Intermediate futures were last seen trading up 2.4% at $100.59 per barrel. Both contracts are up around 45% since the Iran war began.
