Former IEA boss warns how high oil might go

Former IEA head Neil Atkinson warns that the world is facing an unprecedented oil crisis following the closure of the Strait of Hormuz amid escalating conflict between the US, Israel, and Iran. With 20% of global oil and LNG shipments historically passing through the strait, its blockade has triggered a sharp spike in oil prices, with physical barrels already selling for $150 a barrel in some markets. Atkinson emphasizes that the disruption is not just a supply shock but a systemic failure with no immediate alternative routes or production capacity to offset the loss. Despite the IEA’s authorization of a record 400 million barrel drawdown from strategic reserves, the release is insufficient and unevenly distributed, especially to Asia, where demand pressure is highest. He stresses that governments are only now realizing the crisis’s severity, and demand-side measures—like lower speed limits and fuel rationing—may soon be unavoidable. The long-term implications include potential permanent changes to global trade flows, with Iran possibly retaining leverage over shipping access based on geopolitical alignment.