The return of fighting between the United States and Iran threatens to extend the global energy crisis, the International Energy Agency has warned
The risk that the resumption of hostilities could scupper hopes of a swift recovery in energy markets was flagged by the United Nations agency on Friday
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The warning came as a lull in action from US and Iranian forces appeared to pave the way for efforts to revive diplomacy, althoughacks
World oil demand is on track to fall this year for the first time since 2020, the IEA said in its latest monthly oil market report, as the conflict continues to disrupt production and exports across the Middle East
A recovery had been under way on the strength of last month’s US-Iran memorandum of understanding, the agency said, but it cautioned that renewed escalation could complicate the outlook further
The latest round of fighting this week was triggered by rival interpretations of provisions governing the Strait of Hormuz in the MoU. The waterway, before the conflict erupted in April with US and Israeli strikes on Iran, carried roughly a fifth of the world’s oil and liquefied natural gas exports
The IEA reported that the effective closure of Hormuz had cut as much as 14 million barrels per day (bpd) of crude oil flows. The fuel shortage and increase in prices have hit the global economy hard
The UN agency said that following the agreed MoU and reopening of the strait, global oil supply rose by 4.1 million bpd in June, although supply remained 9.4 million bpd below pre-war levels
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Based on an assumption that the strait would return to full operation, the IEA had forecast a 4.62 million bpd surplus in global supply in 2027, compared with an 860,000 bpd deficit in 2026
However, with the fighting resuming, shipping through the strait has once more ground to a halt
Despite the disruption, oil prices held broadly steady. Brent crude stood at $76.37 a barrel in early Friday trading, little changed from Thursday’s close, though up more than $4 from a week earlier
Analysts said the relative calm reflected market confidence that the situation would stabilise, even as tightening inventories point to further upward pressure on prices in the coming weeks
Reports out of the US quotedcted ongoing efforts behind the scenes to revive diplomacy and reinstate the ceasefire
Unnamed USes and then pausing in order to avoid escalation and let diplomacy work
The claim matches the words of a US official who earlier told Al Jazeera that Washington remains committed to negotiations with Tehran and that technical talks for a lasting peace deal will continue
However, the CNNh new attacks if necessary
Regional concerns
r are working to try to bring the US and Iran back to the negotiating table
At the same time, oil-producing states in the region, many of which have also been targeted by Iranian attacks this week, called for restraint
Egypt and Gulf states held phone calls on Friday and said they were urging all parties to contain regional tensions and prevent a wider conflict, adding to the chorus of condemnation that followed Iranian strikes on Bahrain, Kuwait and Jordan
The Gulf Cooperation Council and individual member states have repeatedly pressed Washington and Tehran to preserve the diplomatic gains made under last month’s agreement even as both sides traded fire
The United Nations has also voiced alarm, warning that the renewed clashes risk unravelling diplomatic progress and could carry catastrophic consequences for the region and the global economy if they escalate into full-scale war
The IEA’s forecast continues to rest on the assumption that a ceasefire holds and that Hormuz traffic gradually reopens. Should that assumption fail to hold, the agency’s outlook for a rebalancing of global oil supply and demand next year would come under renewed strain
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