The heads of the International Energy Agency, International Monetary Fund, and World Bank Group have warned as the blockade of the Strait of Hormuz continues its reopening will not immediately relieve the pressure on the global energy supply.

The trio issued a joint statement to update in the ongoing financial impacts of the war in the Middle East.

“As we noted earlier this month, the impact of the war is substantial, global, and highly asymmetric, disproportionately affecting energy importers, in particular low-income countries,” the statement explained. “The shock has led to higher oil, gas, and fertiliser prices, triggering concerns about food security and job losses as well. Some oil and gas producers in the Middle East have also seen a dramatic loss of export revenue.

“The situation remains very uncertain, and shipping through the Strait of Hormuz is yet to normalise. Even after a resumption of regular shipping flows through the Strait, it will take time for global supplies of key commodities to move back towards their pre-conflict levels—and fuel and fertilizer prices may remain high for a prolonged period given the damage to infrastructure. Due to supply disruptions, shortages of key inputs are likely to have implications for energy, food, and other industries. The war has also forcibly displaced people, impacted jobs, and reduced travel and tourism, which may take time to reverse.”

The statement came as the IEA issued its latest oil market report which spelt out the impact the closure of the strait is having on the world’s oil supplies.4

The IEA said oil demand is expected to contract by 80 kb/d this year, as the Iran war “upends our global outlook”. The figure is 730 kb/d less than in last month’s Report and a forecast 1.5 mb/d 2Q26 decline would be the sharpest since Covid-19 slashed fuel consumption.

Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific, mainly for naphtha, LPG, and jet fuel. However, demand destruction will spread as scarcity and higher prices persist.

The IEA added: “Global oil supply plummeted by 10.1 mb/d to 97 mb/d in March, with continued attacks on energy infrastructure in the Middle East and ongoing restrictions to tanker movements through the Strait of Hormuz leading to the largest disruption in history. OPEC+ production fell 9.4 mb/d m-o-m to 42.4 mb/d while non-OPEC+ supply declined 770 kb/d m-o-m to 54.7 mb/d, as lower Qatari output offset gains in Brazil and the United States.

“Global crude throughputs continue to struggle with disruptions to feedstock supplies and infrastructure damage that are tightening global product markets. In April, Middle East and feedstock-constrained refineries in Asia have cut runs by around 6 mb/d, to 77.2 mb/d. Global crude runs are now expected to decline by 1 mb/d on average in 2026, to 82.9 mb/d. Refining margins temporarily surged as middle distillate cracks reached all-time highs.”

Reserves are also under pressure with global observed oil inventories falling by 85 mb in March, with stocks outside of the Middle East Gulf drawn down by a significant 205 mb (-6.6 mb/d) as flows through the Strait of Hormuz were choked off.

At the same time, with limited outlets after the effective closure of the Strait, floating storage of crude and oil products in the Middle East rose by 100 mb and onshore crude stocks in the region were up by 20 mb. China added 40 mb of crude to tanks.