Oil Crisis: IEA Warns of 'Red Zone' as Stocks Deplete, Travel Demand Rises (2026)

Oil markets could enter a 'red zone' by July as global stocks deplete and demand spikes during summer travel, according to IEA Executive Director Fatih Birol. At the Semafor World Economy Summit, Birol warned that the most critical solution to the Iran war energy crisis lies in the full reopening of the strategically vital Strait of Hormuz. If this fails, combined with a drawdown in global reserves and increased travel demand, oil prices may escalate into a red zone by late summer. However, Birol emphasized that the previous market disruptions—such as surpluses from earlier in the year—are now eroding, which complicates the outlook.