02/06/26, warning from International Energy Agency

The International Energy Agency (IEA) has warned that the global economy could face heightened risks if the Strait of Hormuz is not fully reopened in the coming weeks, as the buffers that have so far cushioned the impact of the Iran conflict begin to run out.

Speaking to CNBC-TV18's Shereen Bhan, IEA Executive Director Fatih Birol said the agency is closely monitoring developments but does not currently see the need for another emergency release from strategic oil reserves after its record 400-million-barrel stock release helped ease market pressures.

Birol cautioned that crude oil prices remain significantly above pre-conflict levels and continue to create challenges for oil-importing countries through higher energy costs and inflation.

“We are facing a major problem in the energy markets, and as I said almost two months ago, this is the largest energy crisis in history. We had three major energy crisis in the last half a century; 1973 a major oil crisis, 1979 another major oil crisis, and 2022 after Russia Ukraine war, and natural gas and oil crisis, especially in Europe.

The amount of oil and gas the world has lost combined in these three major crisis is less than oil and gas we lost in this very crisis of Iran war. We lost huge amount of oil, huge amount of natural gas, and this would have major implications for the global economy, especially in Asia, and within Asia developing economies.”

Birol said the oil market had initially been supported by surplus supply and inventories, but those cushions are gradually being depleted.

“My biggest worry is the following: When we enter this crisis, we hit buffers. IEA has said that before February 28, there was a lot of surplus pushing the oil prices down and after the crisis started we have been using this surplus plus the inventories, the stocks that the governments and companies have, and all this gas oil we have already is now diminishing.

The inventories, the stocks, the money in the pocket is diminishing, and not new money is coming in. We are coming at the bottom of those, and as I said, if we are not able to see a fully and unconditional opening of Strait of Hormuz by end of June, July, and August, the travel season around the world in many countries are starting the flights and the cars and the buses, we may be entering the ‘red zone' for the global economy, especially those in Asia,” he told CNBC-TV18's Shereen Bhan