Rising prices of petrol, CNG and LPG have already put pressure on households around the world. However, experts are now warning that the problem could become much bigger than higher fuel bills.
The International Energy Agency (IEA) has warned that the global economy could enter a ‘red zone’ if disruptions to commercial shipping through the Strait of Hormuz continue beyond June. The warning comes as the US-Iran war has affected shipping through the important waterway, which is a key route for global oil and gas supplies.
World Running Out of Energy Buffers
According to CNBC-TV18 report, IEA Executive Director Fatih Birol said that the world is rapidly using up the measures that have helped limit the impact of the conflict on oil prices. He said the current situation is the biggest energy crisis in history, leading to the loss of a significant amount of oil and natural gas supplies. According to him, this could have serious consequences for the global economy.
“The inventories, the stocks, the money in the pocket is diminishing, and new money is not 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.
Birol also warned that energy markets are likely to remain unstable for some time, even if the US and Iran reach an agreement and the Strait of Hormuz reopens. “We are also likely to see upward pressure on inflation in several countries, particularly where currencies are not very strong. Looking at the next few weeks and months, I believe this will be a transitional period. It will not be easy to restore all the Middle East oil supplies, considering that the region exports more than 20% of the world’s oil,” he added.
Will IEA Release More Emergency Oil?
In March, all 32 IEA member countries agreed to release 400 million barrels of oil from emergency reserves to help stabilise oil markets affected by the conflict in West Asia. Birol said the move helped calm markets and reduce oil prices.
“We saw that as soon as the markets learned that this oil was coming to help calm conditions, prices went down by about $20 per barrel. It provided relief, it was very effective, and it was a unanimous decision of our member countries and many countries that are in the accession process to become full IEA members, such as India, also gave strong support,” Birol told CNBC-TV18.
No Decision on Second Oil Release yet
Birol said the IEA is continuing to monitor market conditions closely. However, he stressed that the current situation has not yet reached the point where a second release of emergency oil is needed.
“If we believe it is the right time, we will definitely go for it. But at the moment, we are not there.”
First published on: Jun 03, 2026 08:42 AM IST
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