IEA chief: Oil prices could rise further as buffers deplete

The head of the International Energy Agency (IEA), Fatih Birol, has labeled the ongoing Iran conflict as "the greatest energy crisis in history." He cautioned that the world is rapidly depleting its energy buffers, warning of a "red zone" for the global economy.

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I still see this as the greatest energy crisis in history.

Birol highlighted that the current crisis has surpassed previous energy shocks in terms of the volume of oil and gas lost. He also noted significant losses in fertilizers, petrochemicals, helium, and sulfur, all deemed "extremely important."

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If you look at these three crises and the amount of oil and gas the global energy market lost, it is much less than what we have lost in today's energy crisis.

While oil prices have remained around $97 a barrel, Birol pointed to the severe impact on developing nations and emerging economies, where prices have surged by 50%. He warned that as buffers disappear, prices could climb further, exacerbating inflation and hindering global growth prospects.

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When we begin to run out of buffers, we will see that prices around $100 will be able to go further up.

Norway's role as a reliable energy supplier was acknowledged, with Birol expressing a desire for "three or four Norways" globally. He met with Norwegian ministers in Paris amid broader OECD warnings about the energy shock's contribution to rising prices and slowed growth.

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As a result of this, we will see increasing inflation pressure in many countries, and growth prospects being dampened.