The International Energy Agency (IEA) has warned that the global oil supply crunch will intensify in April, with losses potentially reaching 12 million barrels per day, doubling from March due to the U.S.-Iran conflict and Strait of Hormuz blockade.
IEA's Stark Warning
- Fatih Birol, IEA Executive Director, stated that April's oil loss will be twice that of March.
- The current crisis surpasses historical events like the 1973 and 1979 oil crises, each causing 5 million barrels per day losses, and the 2022 Russia-Ukraine conflict.
- Birol described it as "the biggest in history," affecting not only oil but also LNG and vital commodities like petrochemicals and fertilizers.
Economic and Global Impact
- The supply disruption is expected to drive up inflation and cut economic growth, particularly in emerging economies.
- Energy rationing may become necessary in many countries.
- The blockade of the Strait of Hormuz impacts global supply chains for essential goods.
Context and Reactions
- U.S. President Donald Trump announced that American forces would leave Iran within two to three weeks, offering some market relief.
- However, Birol emphasized that the war, now in its fifth week, has already created a deeper glut than previous crises.
- He warned of potential energy distribution challenges and severe global economic consequences.