Oil markets near danger 'red zone' amid Iran war, warns IEA chief

International Energy Agency Chief Fatih Birol has warned global oil markets could enter the “red zone” by July and August as the Iran crisis continues to disrupt energy supplies.

Speaking at Chatham House in London on Thursday, Birol said dwindling oil stocks, rising summer travel demand and limited fresh exports from the Middle East were increasing pressure on global markets.

“This may be difficult and we may be entering the red zone in July-August if we don’t see some improvements,” Birol said.

He added that reopening the Strait of Hormuz was the most important step towards easing the energy shock linked to the Iran conflict.

The IEA chief said member states could release more strategic oil reserves if necessary.

Birol warned that around 14 million barrels of oil per day had been removed from the market because of disruptions caused by the crisis.

He also said there was “no prospect” of oil production fully recovering within a year.

Meanwhile, diplomatic efforts between Iran and the US appeared stalled despite mediation attempts by Pakistan. Iran has continued to reject demands to export its stockpile of highly enriched uranium.