US-Iran escalation threatens oil supply recovery, warns IEA
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- IEA warned Friday that the resumption of US-Iran fighting threatens to extend the global energy crisis and derail hopes of a swift recovery in energy markets.
- World oil demand is on track to fall this year for the first time since 2020, per the IEA's latest monthly oil market report.
- The Strait of Hormuz closure cut as much as 14 million barrels per day of crude flows; before April's US-Israeli strikes on Iran, the waterway carried roughly a fifth of global oil and LNG exports.
- Global oil supply rose 4.1 million bpd in June after the MoU reopened Hormuz, but remained 9.4 million bpd below pre-war levels, with the IEA's 2027 forecast of a 4.62 million bpd surplus assuming full Hormuz reopening.
- Brent crude stood at $76.37 a barrel in early Friday trading, up more than $4 from a week earlier, though little changed from Thursday's close.
- Pakistan and Qatar are working to bring the US and Iran back to the negotiating table, while Egypt, Gulf states, and the GCC urged both sides to preserve the diplomatic gains of June's agreement.
- CNN sources said Washington was carrying out strikes and then pausing to let diplomacy work, though they warned the US military remains fully prepared to launch new attacks if necessary.
Why it matters: The IEA's 4.62 million bpd 2027 surplus forecast rests entirely on the Strait of Hormuz returning to full operation—which already failed once, cutting 14 million bpd from flows. With Brent up $4 in a week and inventories tightening, consumers and oil-importing economies face renewed price pressure if the ceasefire collapses again.
