The global oil market is at risk of entering a “red zone” by the summer if the ongoing conflict in West Asia fails to see progress toward de-escalation, the head of the International Energy Agency (IEA) has warned. IEA Executive Director Fatih Birol issued the caution on Thursday while speaking at the Chatham House think tank in London, highlighting growing pressure on global energy supplies.

Birol said that the market could face severe strain as early as July or August if the geopolitical situation does not improve. He noted that while global oil supply buffers had initially helped absorb shocks from the conflict, those reserves are now being steadily depleted. According to him, global oil stocks are “eroding,” raising concerns about tightening supply conditions in the coming months.

The warning comes amid continued disruption in global energy flows following heightened tensions in the region. Iran has reportedly restricted tanker movement through the Strait of Hormuz in response to US and Israeli strikes launched in late February, significantly affecting the transportation of oil and gas through one of the world’s most critical energy corridors. The disruption has contributed to rising prices and uncertainty in global markets.

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Birol further cautioned that restoring production and refining capacity to pre-conflict levels would take considerable time, even in the event of stabilisation. He also pointed out that commercial oil inventories are falling rapidly, despite coordinated efforts by several countries to release emergency strategic reserves to stabilise supply.

The IEA, which coordinates energy policy among 32 member countries, has so far overseen the release of around 426 million barrels from emergency stocks. Of this, approximately 164 million barrels have already been drawn down, reflecting the scale of intervention required to offset market pressures. While a brief ceasefire on April 8 temporarily paused hostilities, ongoing negotiations have yet to produce a lasting peace agreement.

Economists warn that prolonged instability in the region could have broader implications for global inflation and economic growth, given the central role of oil in transportation and industrial supply chains. The IEA has reiterated that market stability will depend heavily on diplomatic progress and the restoration of secure energy shipping routes in the coming months.

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