IEA says Mideast turmoil creating ‘largest supply disruption’, restart of Hormuz traffic vital in limiting war impact

The International Energy Agency (IEA) said on Thursday the Middle Eastern conflict is generating the “largest supply disruption” in the annals of the worldwide petroleum market, as Tehran's grip on regional inventories compels Gulf nations to curtail output.

In its market report, the IEA stated crude extraction was presently reduced by at least 8.0 million barrels daily. The struggle, sparked on February 28 by American-Israeli strikes on Iran, is obstructing the world economy's fuel supply and eroding manufacturing potential. The hostilities have seen Iran intensify its blockade on the Strait of Hormuz, through which twenty percent of global crude travels, effectively nearly closing it entirely.

The IEA reported current transits through the passage were operating at under 10% of pre-conflict volumes, which in 2025 reached roughly 15 million barrels daily -- with “no signs of a de-escalation in hostilities or a clear timeline for a recovery in flows through the Strait”.

It emphasized that a restart of traffic would be vital in limiting the war's effect on international markets.

Crude Oil Prices Spike

Oil valuations have fluctuated since the turmoil started, climbing over 30% to nearly $120 a barrel before retreating. Prices briefly exceeded $100 Thursday but then dipped again to approximately $92 a barrel although experts forecast high valuations for the near future amid accounts of further Iranian strikes on tankers, specifically near the Iraqi coastline.

Against that setting, leading European equity markets were down more than half of 1% in early hours trading before rebounding marginally. In Asia, Japan's Nikkei had lost 1% at the finish while Hong Kong ended down 0.7%.

Iran’s Warning

A warning from Tehran to destabilize the global financial system eclipsed a looming milestone release of emergency crude by the IEA. On Wednesday it confirmed its 32 members had consented to provide 400 million barrels of oil from stockpiles -- their biggest distribution ever.

“The co-ordinated emergency stock release provides a significant and welcome buffer, but in the absence of a swift resolution to the conflict, it remains a stop-gap measure,” the IEA warned.

The United States has suggested partially removing penalties against Russia in an effort to balance the consequences from the Hormuz restriction, but Group of Seven countries Wednesday dismissed the proposal.

Emerging from the initial discussions between Moscow and Washington since the outbreak of war, Russian President Vladimir Putin's representative Kirill Dmitriev overnight praised a “productive meeting” with US diplomats in Florida after US President Donald Trump had suggested Putin desired to be "useful" concerning the Iran struggle's energy consequences.

After his Miami meeting Dmitriev said on Telegram both sides had “discussed promising projects that could contribute to the restoration of Russian-American relations and the current crisis on global energy markets.”

He added the US was beginning to understand better “the key, systemic role of Russian oil and gas in ensuring the stability of the global economy.”