The IEA warns that the oil market will enter "red zone" from July 2026.

The International Energy Agency (IEA) has just issued a warning that the global oil market could soon enter "red zone" in July-August 2026. The main reasons identified are strong summer fuel demand, combined with prolonged supply disruptions from the Middle East and a rapid decline in global oil inventories.

The biggest supply crisis in history.

IEA Director-General Fatih Birol noted that the market has yet to overcome the supply shock caused by conflicts in the Middle East. Despite many countries continuously releasing strategic reserves and utilizing commercial inventories, the shortfall has not been fully offset.

Notably, attacks on energy infrastructure and Iran's tightening of shipping through the Strait of Hormuz have disrupted more than 14 million barrels of oil per day. The IEA considers this the largest oil supply crisis in history. The key solution now is to fully and unconditionally restore shipping through this strategic route.

Pressure from the depletion of strategic reserves.

According to the IEA report, the coordinated release of 400 million barrels from strategic reserves is being implemented at a rate of approximately 2.5-3 million barrels per day. At this intensity, the oil reserves from the initial release are expected to be depleted by early August 2026 – a point at high risk of the market entering a state of alert.

Although the IEA affirmed its readiness to coordinate further releases from reserves if necessary, the agency still expressed concern about the pace of production recovery in the Middle East. The rebuilding of refining capacity is projected to be slow and significantly differentiated among countries in the region.

The polarization among oil powers

The IEA is particularly concerned about the case of Iraq. The country is suffering heavy losses in revenue and lacks storage capacity, forcing the closure of many oil fields. This could create significant technical and financial obstacles to restarting production.

Conversely, Saudi Arabia and the United Arab Emirates (UAE) possess a more promising outlook for a faster recovery. Thanks to their abundant financial resources and modern technological infrastructure, these two countries are expected to stabilize production soon to support the global market.