London, May 22 (V7N)- The International Energy Agency (IEA) has warned that the global oil market could enter a “red zone” during July and August due to rising seasonal demand, restricted Middle East exports, and declining global oil reserves.
IEA Executive Director Fatih Birol issued the warning during a speech at Chatham House in London, according to a report by Reuters. He said Brent crude prices have already surged to around $104 per barrel, marking a sharp increase since the escalation of the Iran-related conflict.
Birol noted that the situation in the Middle East has significantly disrupted global supply flows, with attacks on energy infrastructure and restrictions in the Strait of Hormuz contributing to a major supply shortfall. He estimated that over 14 million barrels per day of oil supply have been affected due to the ongoing crisis.
He further warned that restoring oil production infrastructure in the region could take a long time, and in some cases, restarting operations may prove difficult.
According to him, while emergency strategic reserves and commercial stock releases—amounting to nearly 400 million barrels from IEA member countries—have helped stabilize the market temporarily, they are not sufficient to fully offset the disruption.
Birol emphasized that reopening the Strait of Hormuz fully and without conditions remains the most critical step to easing the crisis.
The IEA also confirmed it stands ready to release additional emergency reserves if market conditions worsen further in the coming weeks.
END/SMA/AJ
