'Oil Markets Could Enter A RED ZONE', Warns International Energy Agency Head Fatih Birol | N18V

Ajouté : 2026-06-02

[00:00:16]Hello and welcome to the global dialogues. I'm Shireen Bhan. The on again offagain nature of the Iran US peace talks and continued uncertinity over the straight of hormones have kept the crude oil markets on the edge. Crude prices have seen some wild swings as the US and Iran continue to clash despite the ceasefire and there appears to be no consensus on an agreement to end all hostilities. The straight of hormos remains one of the world's most critical energy choke points with nearly a quarter of global seaborn oil trade passing through it. The head of the international energy agency Fati Barole had warned a few weeks ago that oil markets could soon enter a red zone as global inventories decline and demand strengthens during the peak summer travel season. He's also warned of the worst energy crisis the world has ever seen. Joining me now to discuss all of this and more is the man himself, Fati Barroll. Mr. Barole, many thanks for joining us here on CNBC TV18 on the Global Dialogue. Let me start by asking you about the signals that you're picking up from the oil markets at this point in time. The straight of horm continues to remain blocked. Uh there is no consensus as of today. Oil markets have of course been reacting today under $95 a barrel. What gives you hope if anything at all and what do you fear the most today Mr. Broll?

[00:01:32]>> Uh thank you. Greetings to uh India from International Energy Agency headquarters in uh Paris.

[00:01:43]We are facing a major problem in the energy markets. And as I said uh uh almost uh two months ago, this is the largest energy crisis in the history.

[00:02:04]We had uh three major energy crisis in the last half a century.

[00:02:11]1973 a major oil crisis.

[00:02:16]1979 another major oil crisis and 2022 after Russia Ukraine war and natural gas and oil crisis especially in Europe. So the amount of oil and gas the world has lost combined in this three major crisis is less than oil and gas we lost in this very crisis of Iran war. So we lost huge amount of oil, huge amount of uh natural gas and this would have major implications for the global economy especially in Asia >> and within Asia developing economies. So my biggest worry is the following.

[00:03:16]When we enter this crisis, we had buffers.

[00:03:22]The idea has said that before the 28th of February, there was a lot of surplus.

[00:03:29]There was a lot of oil in the markets >> pushing the oil prices down. And after the uh crisis started, we have been using this surplus plus the inventories, the stocks that the governments and companies have and all this gas, oil we have already is now diminishing. The inventories, the stocks, >> the money in the pocket is diminishing and not new money is coming in. We are coming at the bottom of those. And as I said, if if we are not able to see a and fully and unconditional open of state of Hermus by end of June, July and August the travel season around the world in many countries are starting the flights and the cars and the buses.

[00:04:30]we may be entering the red zone for the global economy especially those in Asia.

[00:04:39]>> You know you talk about entering the red zone uh in July and August which is when you expect travel demand to uh rise uh and you talked about an unconditional opening of the straight of hormuz as things stand today Mr. How likely is that scenario? We've seen Iran and Oman talk about a mechanism being put in place. They refuse to call it a tolling structure, but do we now need to grapple with the reality of that new mechanism coming into place and what will that mean for the oil markets?

[00:05:13]So what the oil markets want to see, what the energy actors players want to see that state is open fully and unconditionally. Which means that the the tankers can travel without having any but any questions about security >> and without paying any fees because the international uh law the maritime law tells us that the the international travel in the waterways is free. So of course it's up to governments to decide uh what they are uh going to agree under which conditions uh this agreement will be made between the different parties. But it is important to give the markets the confidence that the tankers can uh travel without any security questions. And this is of course not an easy task.

[00:06:25]Many people think I talk with all the uh actors uh both governments and the industry many people think if it is closed once it may be closed again. M >> so this is something that I think the countries around the world need to give it good thought what are the energy strategies priorities in the future and what kind of lessons they need to draw from this very situation I >> I'll come to the lessons in just a second but if I can talk to you about immediate next steps Mr. role. Uh you know the 400 million barrel emergency release was the IA's largest ever. Uh you've said that it reduces the pain but it is not the cure. We've also seen strategic reserves for instance for America being drawn down quite significantly. Uh now are we looking at the possibility of a another trunch from the IEA and what will that mean in in terms of the oil markets if in fact you go through with that?

[00:07:31]So when I announced on 11th of March that we are releasing 400 million barrels of oil to the markets, it is historic. It is we have made several releases but it is the largest uh uh uh by a big margin. We have seen that as soon as the markets saw that this uh oil is coming to the markets to calm the markets the prices went down by about 20 US.

[00:08:01]>> It provided a relief. It was very good and it was a unanimous decision of our member countries and many countries who are the accession countries to Ayat to be a full member such as India gave a strong support and here I want to thank Minister Puri for his strong support.

[00:08:23]Now this 400 million bars is big but it is only only 20% of the reserves we have 80% is still in the pocket and uh we will uh see we will assess the market conditions and if we think it is necessary we will be ready to act immediately. So it is up to markets up to market conditions if we think there is a need for that and we are ready to act immediately and uh swiftly.

[00:09:03]>> Uh if I may double down on that Mr. Burl, you said that you will act immediately if the conditions so arise.

[00:09:09]What could trigger the the move on the second branch of the reserves being activated? What could those uh conditions be that will force your hand uh in uh in some ways?

[00:09:24]>> Now we are discussing this uh in the last uh few weeks, few months almost on a daily basis with our uh member governments. We need to uh come to a conclusion that the disruption came to such a level that it is now uh time to uh go ahead. But uh as of uh now as we speak now uh I don't think that we are at this uh stage yet but we are monitoring the markets momentarily and very closely if uh we believe it is the time uh we will definitely go for it but at the moment we are not there. Well, that is important. You're saying at the moment the IEA doesn't believe that it is uh in the position to activate the second tranch as far as the strategic reserves is concerned. You don't feel the conditions are right for that at least at this point in time, but it is something that you're actively monitoring. Let's also understand uh what the process of rebuilding will look like and what timelines we're talking about. Mr. ble assuming that an agreement were to be reached between the US and Iran that the strait were to reopen uh you know in the next few weeks what will that mean in terms of rebuilding in terms of what is already stuck the oil that's stuck at the hormuz what will it mean in terms of rebuilding infrastructure in key markets like Qatar etc >> it will be in some cases in some country it will be easier those countries who are able to store the oil in the major storage facilities and the countries who have strong financial muscles and the technical capabilities. For example, Saudi Arabia I think will move very fast. Uh Emirates can move also fast and some others. But uh some countries such as Iraq, I am worried about Iraq uh because Iraq's uh oil storage facilities are not as big as the other countries in the Gulf region and there are many shutins of the fields. It may take some time and also the as I said the the the financial capabilities of the countries are important and it will be also depending on the uh the damage that the facilities have witnessed such as the ones in Qatar. I think it is uh rather naive to expect that the kata lang terminals will go back very quickly where they were just before the war. So if it is uh to sum up if the homeless straight is open if there is a a peace it is a agreement it will be rather naive to think that the next day everything will go back where they were before the war. It will be a rocky pro process, volatile markets for some time uh to come.

[00:12:42]>> Uh you know if you're saying that it will be a rocky process, it will continue to be volatile even if the strait opens and there is an agreement.

[00:12:49]What does that mean in terms of oil prices? We've seen wild swings from 144 now down to about 95. Uh what do you see as the possible ceiling? What do you see as the possible floor?

[00:13:03]So I uh will not uh mention any specific uh uh price levels but uh first of all I would like to remind all of us that the some uh observers say the oil prices are uh low but they are not low. They have uh let's remember that they are at least $30 higher than where they were just uh before the war has started and it is already being a major pain on the economies of many oil importing countries especially developing countries and we will see they are going to push the inflation numbers up in several countries especially when the currencies are not so strong. Looking at the next few weeks and months, I believe it will be a rather a transitional period and it will be not easy to get all the Middle East oil which exported more than 20% of the uh global oil to the rest of the world to see that everything will be easy and the process will come down the next day. I think we need to uh uh expect that the prices will be at these levels uh for some uh time uh to come. And I am only worried once again that the the state of hormos is not open before the end of uh June before the inventories are going completely to the bottom and and the before the travel season in many parts of the world starts otherwise we may well see even higher prices uh than today.

[00:15:02]>> Let me end Mr. Broll. I know you're out of time, but let me end by asking you about the future as far as the OPEC is concerned, especially with UAE exiting the block. What do you see as the future as far as the oil block itself is concerned?

[00:15:18]>> I mean it is of course it is up to OPEC countries to decide what they are going to do. And uh I have recently when I was in Vienna uh meeting the prime minister of Austria for uh several uh issues. I had the opportunity to visit the OPEC secretary general and I think it is important that the all the parties in this difficult days have a good sincere dialogue because this is a situation uh that we don't have the luxury uh to have tensions between the producing countries, consuming countries and I think that it requires a good communication, good dialogue among the parties around the world, Emirates, they made their own uh announcement, the colleagues from the Emirates, both the uh minister and other authorities that they chose uh this way uh and they're going to increase their production in the next years to come and I also have good contacts, good coordination and good dialogue with the the authorities and the government of United Arab Emirates.

[00:16:36]>> Well, Mr. Broll, always a pleasure.

[00:16:38]Appreciate you joining us. We hope it doesn't get to that uh scenario of the red zone that you spoke of and we hope that there is a breakthrough in the talks that are currently ongoing. But appreciate you joining us this uh afternoon to talk to us about uh all things energy. Always a pleasure. Thanks very much for joining us on the global dialogue.

[00:16:58]>> Thank you.

[00:16:59]>> Well, that is Fati Barroll of the International Energy Agency uh uh telling us very clearly about what the possible pain points are likely to be.

[00:17:09]In his words, it would be naive to imagine that even if there were to be an agreement between uh Iran and the US that oil prices are going to drop significantly as is being claimed by President Trump. But of course also highlighting that there needs to be uh safe, secure and unconditional movement through the straight of hormone. The red zone that he talks of is the July to August period when travel typically is expected to pick up and that could put pressure on demand supply already constrained. Importantly, the IEA is not looking at releasing the second tranch of the strategic reserves. Remember, they've already done a tranch, the first tranch of a historic 400 million barrels, but they don't feel the need to act on the second tranch just yet. We will take a break here, but there's a lot more coming up for you on CNBC TV18.

[00:17:59]Stay tuned. We're back with more right after this.