The global energy crisis triggered by the Iran war is poised to worsen sharply in April, with the International Energy Agency warning that the supply shortfall next month could be twice as severe as in March.
The energy crisis has raised the risk of fresh inflation shocks, slower economic growth, and possible fuel rationing across vulnerable economies.
The warning from IEA Executive Director Fatih Birol is among the starkest assessments yet of the market fallout from the closure of the Strait of Hormuz, the world’s most critical oil transit chokepoint. Speaking on the In Good Company podcast, Birol said March’s disruption had been partially masked by cargoes that had already cleared Hormuz before hostilities erupted.
Register for Tekedia Mini-MBA edition 20 (June 8 – Sept 5, 2026).
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab.
Those barrels are still reaching ports and refiners. But April will be different.
“The loss of oil in April will be twice the loss of oil in March,” he said, adding that the impact would be amplified by disruptions to LNG flows and refined products.
That observation is critical to understanding why markets may be underestimating the scale of the coming shock. March’s flows benefited from pipeline effects: oil and gas cargoes already at sea continued to arrive, temporarily cushioning the market. In April, that buffer largely disappears, meaning refiners in Asia and Europe are likely to confront the full force of the supply squeeze.
According to the IEA, more than 12 million barrels per day of oil supply have already been lost, a level Birol said exceeds the combined impact of the oil shocks of 1973 and 1979, as well as the gas disruptions that followed Russia’s invasion of Ukraine in 2022.
For context, each of the 1970s oil crises removed about 5 million barrels per day from the global market. This time, the world is dealing with more than that — and simultaneously facing LNG shortages, jet fuel constraints, and tightening diesel markets. That is why the IEA chief described the present disruption as potentially the biggest energy crisis in history.
The most immediate pressure point is refined products. Birol said shortages in jet fuel and diesel are already evident in Asia and are expected to spill into Europe by late April or early May. This matters because diesel is the backbone of freight, manufacturing, agriculture, and power backup systems in many economies.
A shortage here rapidly feeds through to food prices, logistics costs, and industrial output, making the inflationary implications significant.
Higher crude prices have already pushed U.S. gasoline prices above $4 per gallon, while Brent crude recorded a historic monthly surge in March before easing slightly. The knock-on effects are likely to be felt most acutely in emerging markets, where fuel imports account for a large share of trade balances and household budgets.
Birol explicitly warned that the crisis could cut economic growth in many countries, with emerging economies facing the greatest risk of dislocation. This is especially relevant for countries in Asia and Africa that rely heavily on imported fuel and LNG for power generation, transportation, and cooking gas.
The IEA is now openly considering another strategic stock release. Earlier this month, its 32 member states agreed to a record 400 million-barrel emergency release, the largest coordinated drawdown in the agency’s history.
But Birol was careful to frame that as only a temporary pain reliever.
“This is only helping to reduce the pain, it will not be a cure,” he said, making clear that the only lasting solution is the reopening of Hormuz.
That assessment is reinforced by fresh U.S. data.
The U.S. Energy Information Administration reported that U.S. crude production in January fell by 410,000 barrels per day, the sharpest monthly drop in two years, partly due to severe winter storms. At the same time, distillate demand surged as colder weather boosted heating and power generation needs.
This has left diesel inventories tighter than usual, just as the global market enters a war-driven supply crunch. The consequence is a market that is increasingly vulnerable not only to crude shortages but to a squeeze in refined fuels, which tends to hit consumers and industry faster than upstream disruptions.
The bigger story is that the world is moving from an oil price shock to a broader supply-chain and growth shock. This is no longer simply about crude prices rising on geopolitical fears. It is about physical shortages of energy products, higher transport and manufacturing costs, pressure on central banks, and the growing possibility that governments may be forced into demand-side measures such as reduced speed limits, remote work directives, and fuel rationing.
If April unfolds as the IEA now expects, analysts expect the economic consequences to extend far beyond energy markets.