The onset of peak summer demand for fuel, combined with the lack of new oil supplies from the Middle East, could push the market into the "red zone" in the second half of summer.
This was stated by the Executive Director of the International Energy Agency (IEA), Fatih Birol, as quoted by Reuters.
"We could enter the red zone in July or August if we do not see any improvement in the situation," Birol said.
He did not specify what the "red zone" would look like, but noted that the surplus in the oil market that existed before the war in Iran, the reduction of commercial stocks and the release of strategic oil reserves are insufficient to resolve the crisis.
Birol called the opening of the Strait of Hormuz the only and most important solution that can stabilize the situation.
He also said that it will take a long time to return oil production and refining capacity in the Middle East to pre-war levels. The timing of the recovery will vary from country to country.
The IEA chief also said that his biggest concern is Iraq. The country's finances have been hit hard by a decline in oil revenues, and a lack of storage capacity has forced Baghdad to shut down oil fields, which could be difficult to restore.
On the other hand, countries such as Saudi Arabia and the United Arab Emirates have access to financing and advanced technology, which could make the recovery smoother.
As Ukrainian News Agency earlier reported, on March 11, IEA member countries agreed to release 400 million barrels of oil products to stabilize the situation on the world market due to the war in the Middle East.
Later, the IEA said that this release would affect about 20% of the strategic reserves of member countries. If the situation requires it, they can release additional volumes.
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