Oil market could enter ‘red zone’ by July as stocks dwindle: IEA chief
CNBC • • business
Key Points:
- The International Energy Agency (IEA) warns that oil markets could enter a "red zone" by July or August due to dwindling global stocks and increased demand during the summer travel season.
- IEA Executive Director Fatih Birol emphasized that the key solution to the energy shock caused by the Iran war is the full and unconditional reopening of the Strait of Hormuz, a vital oil shipping route.
- Since U.S. and Israeli-led strikes on Iran began in late February, shipping traffic through the Strait of Hormuz, which handles about 20% of the world's oil and LNG, has nearly stopped, exacerbating supply disruptions.
- Birol highlighted that developing Asia and Africa will feel the greatest impact of the crisis and expressed concern over both energy and global food security due to the conflict.
- The IEA is prepared to coordinate additional strategic oil reserve releases if Middle East production and refining do not return to pre-war levels promptly.