Oil markets nearing 'red zone' as Iran crisis continues, warns IEA chief
Source: The Guardian
Thu 21 May 2026 12.10 EDT
Last modified on Fri 22 May 2026 00.28 EDT
Oil markets will enter the “red zone” by July and August as stocks dwindle before the summer travel season amid a shortage of fresh oil exports from the Middle East, the executive director of the International Energy Agency warned on Thursday. Fatih Birol added that the most important solution to the Iran war energy shock was a full and unconditional reopening of the strait of Hormuz.
Speaking to the London thinktank Chatham House, Birol said it was open to IEA members to release more strategic oil reserves, as they had previously in March, and said the IEA stood ready to coordinate. As much as 80% of IEA’s collective reserves have not been released.
He warned that while stocks were eroding, no new oil was coming from the Middle East and the demand was increasing, mainly caused by the travel season. “This may be difficult and we may be entering the red zone in July-August if we don’t see some improvements,” Birol said.
Adding that he had “never seen the dark and long shadow of geopolitics so dominant in the energy sector”, Birol also said he feared extremist parties in Europe might opportunistically abuse the coming inflation to argue it represents the failure of existing political systems when, in truth, the price of oil is set internationally. Birol also said that Iran did not have endless storage capacity and its industry would face difficulties.
Read more: https://www.theguardian.com/world/2026/may/21/oil-markets-nearing-red-zone-as-holiday-season-nears-warns-iea-chief
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