The International Energy Agency (IEA) has expressed renewed concern over the supply and pricing of fuel oil in the global market. The agency’s chief, Fatih Birol, has warned that due to rising demand, depleting reserves, and a decline in oil exports from the Middle East, the global oil market could reach a ‘red zone’ or extreme risk state by July-August. Speaking at the Chatham House think tank in London on Thursday (May 21), he stated that global oil demand will increase during the summer travel season.

However, adequate new oil supplies are not entering the market from the Middle East at the same time, making the situation increasingly complex.

According to a report by The Guardian, the ongoing conflict surrounding Iran has created major instability in the global energy market. According to Fatih Birol, keeping the Strait of Hormuz completely and unconditionally open is now crucial to resolving this crisis. He expressed fear that the current situation could assume a more severe form than the 1973 oil crisis, the 1979 energy instability, or the post-2022 energy crisis.

According to the IEA chief’s statement, the war situation has created a daily oil shortfall of approximately 14.0 million barrels.

He also considers the likelihood of production returning to fully normal levels within the next year to be very low. Fatih Birol noted that oil-dependent economies, such as Iraq, may particularly face an investment crisis in new production.

In his words, “Such a prolonged and deep geopolitical impact on the energy sector has never been seen before.” Meanwhile, although Pakistan is attempting to mediate between Iran and the United States, uncertainty has emerged regarding progress in the talks.

Pakistan’s Interior Minister Mohsin Naqvi is currently in Tehran.

However, doubts about the outcome of the discussions have arisen as the country’s Army Chief Asim Munir’s visit was postponed. On the other hand, Iran’s Supreme Leader Mojtaba Khamenei has declared that the country will not send its stockpile of enriched uranium to any other nation.

Conversely, US President Donald Trump has claimed that the United States could take control of the stockpile and destroy it. Amidst this situation, Iran has announced the formation of a new authority to monitor commercial shipping in the Strait of Hormuz.

However, the United Arab Emirates has commented that this initiative is unrealistic.

The country’s senior diplomatic advisor, Anwar Gargash, stated that Iran is attempting to create an artificial reality under military pressure. According to analysts, with Middle Eastern oil supplies becoming uncertain, many countries around the world may now rapidly shift toward alternative fuels and renewable energy sources.