IEA warns of historic April supply shock as Brent hits $110 amid Iran conflict

Key Points

• IEA Executive Director Fatih Birol predicts that April will bring a deeper oil supply crunch, potentially the largest energy shock in modern history.
• Oil prices surged on Thursday, with Brent crude climbing toward $110/bbl following signals that U.S. military operations in Iran will continue.
• The global market has lost 12 million b/d of oil—more than the 1973 and 1979 crises combined—leading to fears of a global recession.
• The IEA is considering a second release of strategic oil stocks beyond the record 400 million barrels already committed by member nations.

Main Story

The International Energy Agency (IEA) has issued a stark warning that the global energy market is entering a period of unprecedented volatility, with Executive Director Fatih Birol predicting that “April will be much worse than March.”

The warning came as oil markets rallied sharply on Thursday, triggered by President Donald Trump’s signal that U.S. military operations against Iran would continue “well into April.”

This rhetoric effectively ended a brief period of market optimism, refocusing investor anxiety on the Strait of Hormuz, a critical corridor for one-fifth of the world’s oil and LNG trade.

Birol explained that the relative stability seen in March was a result of “logistical lag,” as cargoes that entered the strait before the escalation continued to reach their destinations.

However, he warned that for April, “there is nothing” left in the pipeline. With a total loss of 12 million b/d in global supply, the current crisis has already surpassed the combined impact of the 1973 and 1979 energy shocks.

The IEA is now monitoring the markets on a 24-hour basis and remains prepared to recommend further releases from emergency reserves to prevent a full-scale global recession.

The Issue

The most pressing challenge is the “Refined Product Deficit,” specifically regarding jet fuel and diesel. While crude oil prices capture headlines, the actual shortage of processed fuels is already being felt in Asia and is expected to hit Europe by early May. This “Secondary Shock” could cripple transport and logistics sectors even if crude prices stabilize. Furthermore, the reliance on Strategic Petroleum Reserves (SPR) is a finite solution; with 400 million barrels already committed, the IEA’s capacity to continue buffering the market against a prolonged “Strait of Hormuz Blockade” is being pushed to its absolute limit.

What’s Being Said

• “The next month, April, will be much worse than March,” stated Fatih Birol, citing the depletion of transit cargoes as the primary reason for the coming crunch.
• Birol noted the historic scale of the crisis, stating, “Today, we lost 12 million b/d—more than two of these oil crises [1973 and 1979] put together.”
• Market analysts observed that Brent crude reversing its losses to hit $110/bbl reflects an immediate “repricing of geopolitical risk” following U.S. signals to “finish the job” in Iran.
• The IEA head emphasized that “if we think there is a need, we may well make a suggestion to release more reserves,” targeting the immediate concerns of jet fuel and diesel shortages.

What’s Next

• European nations are expected to implement emergency energy conservation measures as the supply of diesel and jet fuel begins to tighten in April.
• The IEA’s 32 member countries will meet to deliberate on the feasibility and timing of a supplementary strategic reserve release.
• Shipping and insurance industries are likely to see another spike in “War Risk Premiums,” further increasing the landed cost of any energy that manages to bypass the conflict zone.
• Global economists will be watching for signs of recessionary pressure in G7 nations, as high energy costs begin to weigh heavily on industrial output and consumer spending.

Bottom Line

The global economy is facing a “perfect storm” where geopolitical resolve meets logistical exhaustion. As the last of the pre-war oil cargoes reach their ports, the reality of a 12 million b/d deficit is set to hit in April. For the IEA, the challenge is no longer just about price stability, but about preventing a total structural failure of the global energy supply chain.

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