Fuel costs are shown on a sign as patrons refuel their autos at a service station on April 13, 2026, in Miami, Fla.Joe Raedle/Getty Images
The Iran conflict triggered the "most extreme petroleum supply crisis on record," the International Energy Agency (IEA) declared in a fresh analysis on Tuesday, cautioning that elevated costs would curtail demand for crude, the main essential resource of the worldwide economy.
In March, petroleum costs achieved their greatest single-month increase ever, the IEA stated.
The IEA — a Paris-based organization comprised of 32 member states, including the U.S. — alerted of a widespread wave of “demand destruction" in the analysis. In such a case, elevated costs would render petroleum unaffordable for numerous consumers, compelling them to discover substitutes or forgo energy usage completely.
The dispute, which commenced on Feb. 28, resulted in Iran's de facto shutdown of the Strait of Hormuz, a vital shipping lane that enables the transportation of approximately one-fifth of the worldwide supply of petroleum and natural gas.
Petroleum demand is anticipated to diminish by 80,000 barrels each day (bpd) this year as surged costs endure, the IEA noted, signifying a notable decrease from year-over-year escalation of 640,000 bpd projected in the group’s preceding monthly report.
"Initially, the most substantial curtailments in petroleum utilization have materialized in the Middle East and Asia Pacific," the IEA articulated. "Nevertheless, demand destruction will extend as deficiency and increased costs continue."
International Energy Agency (IEA) Executive Director Fatih Birol speaks during a press conference in Istanbul, Turkey, March 12, 2026.Dilara Senkaya/Reuters, FILE
Offering some reprieve, U.S. petroleum costs declined by approximately 6% on Tuesday as dealers seemed optimistic regarding a negotiated settlement to the Middle East hostilities.
West Texas Intermediate futures price, the standard barometer for U.S. trading, registered at approximately $92 per barrel, notably below a recent apex. Nonetheless, the cost of petroleum stood 37% greater than its pre-war valuation.
The overwhelming majority of fuel conveyed through the strait is destined for Asia, imposing the most intense burden on energy provisions in that region. Since petroleum and gas are exchanged on a worldwide market, however, the deficiency has initiated cost escalation for almost everyone.
Gasoline costs in the U.S. averaged $4.11 per gallon on Tuesday, representing an increase of $1.13 since the conflict commenced, AAA figures revealed.
Last month, the IEA conveyed that its member nations would discharge 400 million barrels of petroleum collectively from their emergency reserves, signifying the most substantial petroleum discharge in the group's chronicle.
"The hostilities in the Middle East are exerting significant influences on global petroleum and gas markets with major ramifications for energy security, energy affordability and the global economy," Faithe Birol, executive director of the IEA, stated last month.
President Donald Trump established an April 7 timeline for Iran to completely reopen the Strait of Hormuz or encounter extensive assaults on its vital infrastructure. Hours before the deadline elapsed, Trump proclaimed he had concurred to suspend scheduled shelling for a fortnight if Iran consented to reopen the Strait of Hormuz.
But ensuing U.S.-Iran dialogues in Pakistan failed to attain a peace accord. Trump stated that Iran's nuclear agenda was the foremost impediment, and that the U.S. would counteract with a blockade of the Strait of Hormuz commencing at 10 a.m. ET on Monday.
Trump mentioned that another assembly of peace talks with Iran in Islamabad might transpire "over the next couple of days," during a telephone interview with the New York Post on Tuesday.
ABC News' David Brennan and Meredith Deliso aided in this report.
Sourse: abcnews.go.com