With no end in sight to the Strait of Hormuz crisis caused by President Donald Trump’s illegal war with Iran, the head of the International Energy Agency warned Monday that global energy supplies are running dangerously low.
IEA executive director Faith Birol told reporters in Paris that the world only has weeks’ worth of oil reserves left, raising the likelihood that energy prices will soar even higher in the near future.
Birol said that oil inventories are “declining rapidly” and added that there was “a perception gap in the markets between the physical markets and the financial markets,” as the price of oil in futures markets has not yet risen to a level that accurately reflects the coming supply crunch.
In his remarks to the press, given on the sidelines of a G7 gathering taking place this week in France, Birol warned that it’s only a matter of time before the supply shortage of fertilizer, which was also caused by the Iran War, leads to a surge in food prices that “might give a big push to inflation numbers.”
The Financial Times reported on Sunday that energy markets are approaching a “tipping point” where prices could see another upward surge that would throw the global economy into a recession.
Paul Diggle, chief economist at fund manager Aberdeen, told The Financial Times that he has been modeling the economic impact of oil hitting $180 per barrel, which he said would set off a global inflation crisis.
“We are taking that outcome very seriously,” Diggle said. “We are living on borrowed time.”
Oil prices briefly fell last month after the US and Iran announced a ceasefire agreement. However, the Strait of Hormuz has remained closed throughout that period, and Trump is reportedly preparing to restart attacks on Iran in the near future if no deal to reopen the strait is reached.
Offering ‘no tangible concessions,’ Trump issues latest violent threat
In a Sunday Truth Social post, Trump again threatened Iran with destruction unless it agrees to his demands.
“For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them,” the president wrote. “TIME IS OF THE ESSENCE!”
Trump rejected Iran’s latest peace proposal last week; the country has reportedly offered significant concessions on its uranium enrichment, but seeks to have separate nuclear talks after achieving peace and reaching a deal to reopen the Strait of Hormuz, which the Iranians effectively closed in retaliation for the US-Israeli attacks.
Since launching the conflict, Trump has demanded the dismantling of Iran’s missile arsenal as well as its nuclear program, which Iran has said is not for military purposes, and has called for the country to cut ties with its regional allies.
Iran’s Mehr news agency said Sunday that Trump had offered “no tangible concessions” in his response to the Iranians’ latest proposal.
“The United States,” said the news outlet, “wants to obtain concessions that it failed to obtain during the war, which will lead to an impasse in the negotiations.”
Trump told Fox News in Beijing over the weekend that the Iranians are “crazy, and you know what? Because of that, they cannot have a nuclear weapon,” explaining why he viewed it as “unacceptable” for nuclear talks to take place separately after a peace deal is brokered.
Trump reportedly spoke to Israeli Prime Minister Benjamin Netanyahu Sunday about the possibility of renewing strikes on Iran, which would break a ceasefire that was reached more than a month ago.
Danny Citrinowicz, a senior researcher at the Institute for National Security Studies, said Sunday that “the only realistic path to a diplomatic breakthrough would require Washington to engage more directly with the structure and substance of the Iranian proposal itself.”
“Iran’s priorities remain consistent: ending what it views as economic siege conditions, reopening maritime access and reducing pressure in the Gulf, negotiating an end to the broader conflict, and only afterward addressing the nuclear issue,” said Citrinowicz. “At the present moment, it is difficult to see the Iranian leadership agreeing to any framework that does not meaningfully engage with those core demands.”
As with Trump’s earlier threats of violence, including one in April in which he declared that Iran’s entire civilization would die, “never to be brought back again,” Iranian officials said the president’s latest comments—which followed his posting of an image of himself on a military ship accompanied by the words, “It was the calm before the storm”—would not be tolerated.
A spokesperson for Iran’s armed forces, Abolfazl Shakarchi, told Mehr that “repeating any folly to compensate for America’s disgrace in the Third Imposed War against Iran will result in nothing but receiving more crushing and severe blows.”
Reporting for Al Jazeera, correspondent Almigdad Alruhaid said that the “kind of language” displayed by Trump on Sunday “is not acceptable here in Tehran. They are projecting defiance rather than [giving] an immediate response to this kind of rhetoric.”
“Behind all of this rhetoric, there is awareness that the diplomatic window right now is narrowing,” said Alruhid.
Meanwhile, US Senator Lindsey Graham (R-SC) urged Trump to “hurt them more” in order to force a deal, calling on the president to go through with bombing Iran’s energy infrastructure as he’s threatened to in recent months.
“The reason why Trump didn’t do this during the war—despite threatening it—was because he realized Tehran would retaliate and take out the energy infrastructure in the [Gulf Cooperation Council] states,” said Trita Parsi, executive vice president at the Quincy Institute for Responsible Statecraft. “This would lead to a far worse oil crisis—one rooted in production problems, not just a bottleneck in the Persian Gulf.”
“The global economy would be thrown into a deep recession. Fuel shortages would lead to food shortages worldwide. Trump’s presidency would be destroyed,” he said. “None of this matters to Lindsey. He’ll burn the entire planet as long as he gets his war. Trump’s biggest mistake has been to listen to Lindsey and his allies.”
-Common Dreams