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Brent Tops $111 As IEA Warns Oil Crisis Could Persist Into 2027
Brent Tops $111 As IEA Warns Oil Crisis Could Persist Into 2027
Brent crude rises above $111 per barrel amid renewed fears of US-Iran conflict escalation.
IEA chief Fatih Birol warns the Strait of Hormuz could close again, and energy markets may not normalise in 2027.
Diesel prices have doubled from pre-war levels, while the IEA says member countries retain 1.6 billion barrels in emergency reserves.
October 21, () – Brent crude oil rose above $111 per barrel on Tuesday before retreating to around $109, as the International Energy Agency warned that global energy markets might not return to normal in 2027 amid persistent Middle East tensions.
The price movement reflected concerns that renewed conflict involving the United States and Iran could disrupt crude production and shipments through strategic routes in the region.
CNN reported Brent trading above $111 per barrel, while Oilprice.com data later showed the benchmark retreating to $109.
The Executive Director of the IEA, Fatih Birol, warned that the outlook remained uncertain, with the potential for further disruptions to oil supplies and refined petroleum products.
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“I don’t see any credible pathway that 2027 will be a year of normalisation”, Birol was quoted as saying at an industry gathering in London.
Strait of Hormuz Photo credit Getty Images
Strait Of Hormuz Remains A Major Risk
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Birol warned that the Strait of Hormuz, which handled about one-fifth of global oil and natural gas supplies before the conflict, could be closed again.
“The Strait of Hormuz has been closed once, it can be closed again”, he said.
The warning comes amid heightened tensions involving Washington and Tehran, alongside attacks affecting regional security and oil shipments. Saudi Arabia has also faced attacks by Iran-backed Houthi militants, adding to uncertainty over energy flows.
Despite the risks, oil shipments from the region have recovered. Data from analytics firm Kpler showed that the seven-day average of oil flows through the Strait of Hormuz, the Red Sea and the Gulf of Oman had risen to just over 24 million barrels per day as of Tuesday, above pre-war levels.
The restoration of Saudi Arabia’s pipeline exports has helped sustain regional supplies, although tanker crossings through the Strait of Hormuz remain well below pre-war levels, according to CNN.
Diesel Prices And Supply Risks Deepen Concerns
Birol cautioned that crude prices alone do not capture the full extent of the crisis because consumers and businesses rely on refined products.
“We don’t use crude oil, we use products”, he said, noting that diesel prices had doubled from pre-war levels, partly due to the conflict involving Iran and attacks on Russian refineries.
The outlook could worsen as diesel demand typically increases during the coming season while several major refineries are scheduled for maintenance. The combination could tighten supplies even if crude production and shipments remain relatively resilient.
“We are on thin ice, and I am very worried about this”, Birol said.
IEA Executive Director Faith Birol Photo credit Reuters
IEA Keeps Emergency Reserves Available
The IEA chief said member countries would consider releasing additional emergency oil reserves if necessary to ease supply pressures.
In March, member countries agreed to release 400 million barrels from emergency stocks. About 80 percent of that volume had been supplied to the market, leaving the remaining 20 percent yet to be released, according to Birol.
The agency’s members still held approximately 1.6 billion barrels in reserves, providing a potential buffer against further supply disruptions.
“We are keeping it for the rainy days”, he said.
The latest warning highlights the risk that geopolitical tensions, shipping disruptions and refinery constraints could keep energy markets volatile into 2027, even if crude flows recover. For oil-importing countries, sustained increases in diesel and other refined-product prices could continue to raise transport, production and distribution costs.
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