Global oil stocks shrink rapidly amid US–Iran conflict, IEA issues stark warning

The International Energy Agency (IEA) has issued a stark warning that world oil stocks are shrinking rapidly amid the turmoil sweeping the Middle East. IEA Executive Director Fatih Birol said commercial inventories were falling sharply as tensions between Iran, the United States and Israel escalated. The crisis is triggered by Iran’s effective stoppage of tanker traffic through the Strait of Hormuz in retaliation for US and Israeli attacks in late February. Closing this vital waterway has constricted global oil and gas flows and driven prices higher. Key points about current energy supply conditions include: US President Donald Trump warned that time is running out for Iran and threatened that nothing would be left if a peace deal is not reached amid a fragile ceasefire. Iran, through the Supreme National Security Council, announced the establishment of a new body, the Persian Gulf Strait Authority, to manage Hormuz operations and provide real-time updates on the situation. Despite global concern, Ryanair Chief Executive Michael O’Leary said jet-fuel supplies to Europe remain relatively robust due to significant imports from West Africa, the Americas and Norway. O’Leary, however, conceded that global jet-fuel spot prices have jumped above £112 per barrel and are expected to remain high for several months, forcing airlines to hedge fuel supplies to guard against further price swings. Iran has formed the new authority to oversee Hormuz in the context of rising tensions with Washington and threats to global energy distribution. US President Donald Trump reportedly postponed a military strike on Iran for negotiations, a move indexed to domestic political pressures amid a period of declining popularity. Tensions in the Strait of Hormuz renewed after Iran issued firm statements. The conflict is described as triggering the largest disruption to oil supplies in modern history. Economists forecast US inflation to rise to around 6% in the second quarter of 2026 due to the Hormuz crisis, with economic growth slowing to about 2.2%.