Oil supply crunch will worsen in April, IEA warns

The coming month will see an intensification of the oil supply glut that has driven prices sharply higher since the start of the Iran war, according to the head of the International Energy Agency.

Speaking to the “In Good Company” podcast hosted by Nicolai Tangen, CEO of Norges Bank Investment Management, Birol said the energy crisis sparked by the U.S.-Iran war was the worst in history.

“The next month, April, will be much worse than March,” he said. He explained that in March there were already some cargo ships carrying oil and gas that transited through the Strait of Hormuz before the war broke out.

“They are still coming to ports, still bringing oil and energy and other [things],” he said. “In April, there is nothing. The loss of oil in April will be twice the loss of oil in March. On top of that you have LNG and others. It will come through to inflation, I think it will cut economic growth in many countries, especially emerging economies. In many countries the rationing of energy may be coming soon.”

U.S. President Donald Trump said Tuesday that American forces would leave Iran “in two or three weeks,” prompting a broad relief rally across financial markets.

But Birol said the war, currently in its fifth week, had already created a deeper glut than those seen in previous crises such as those in the 1970s and following Russia’s full-scale invasion of Ukraine in 2022.

“When you look at the [1973 and 1979], in both of them we lost each about 5 million barrels per day of oil. These oil crises led to global recession in many countries,” he told Tangen. “Today, we lost 12 million barrels per day — more than two of these oil crises put together.”

He added that the gas supplies being lost as a result of the conflict and the blockade of the Strait of Hormuz, a critical shipping route, also exceed the amount lost to the market when Russian gas flows were disrupted four years ago.

“The current crisis is more than all these three put together. Plus, in addition to this, there are many vital commodities — petrochemicals, fertilizers, sulfur — they are very important for the global supply chains,” he said. “We are heading towards a major, major disruption, and the biggest in history.”

Earlier this month, the IEA’s 32 member countries agreed to release a record 400 million…