The Global Energy Crisis as a Catalyst for Diversification: An Overview of the IEA’s New Oil Market Report
The International Energy Agency (IEA) has published a new report on the oil market, titled Oil Market Report — May 2026. The data released by the agency confirms that the world is in the midst of a severe energy crisis. The combination of a large-scale military conflict in the Middle East and the disruption of key logistics routes has led to shocking supply and price figures.
But won’t this unprecedented crisis serve as a powerful catalyst for radical diversification, the development of renewable energy, and the strengthening of energy security?
Key Figures from the Oil Market Report — May 2026
The analytical section of the IEA report highlights radical changes in the balance of supply and demand:
Global oil demand is expected to decline by 420,000 barrels per day in 2026 (to 104 million barrels per day). The sharpest drop was recorded in the second quarter of 2026 — a decrease of 2.45 million barrels per day. The petrochemical and aviation sectors proved to be the most vulnerable.
Global oil supplies fell by another 1.8 million barrels per day in April. Total losses since February 2026 have amounted to a staggering 12.8 million barrels per day. Due to the closure of the Strait of Hormuz, Gulf countries are producing 14.4 million barrels per day less than they did before the war. Only the increase in exports from the Atlantic Basin provides some relief.
Oil refineries are being forced to cut back on production due to infrastructure damage and a shortage of raw materials. Refining volumes are projected to fall by 4.5 million barrels per day in the second quarter of 2026. At the same time, refineries are gradually adapting to the crisis, and new trade flows are emerging to offset the loss of exports from Persian Gulf countries.
According to preliminary data, global oil inventories fell by 129 million barrels in March and by another 117 million barrels in April. Also in April, North Sea Dated crude oil futures traded within an unprecedentedly wide range—nearly $50 per barrel. This price volatility was caused by conflicting signals regarding whether the U.S. and Iran would reach an agreement to end the conflict in the near future.
The IEA report clearly indicates that even if traffic through the Strait of Hormuz gradually resumes starting in June, the oil market will remain in deficit at least until the end of 2026.
The Scale of the Crisis and Energy Security: Comments from IEA Representatives
Fatih Birol, Executive Director of the IEA, offered a clear assessment of current events in his statement. According to him, this situation far exceeds the 1973 and 1979 oil crises, as well as the 2022 gas crisis caused by Russia’s war against Ukraine, in terms of its complexity and consequences.
“Today’s losses in global oil supply amount to about 11–12 million barrels per day, which is twice as much as during the crises of the 1970s. Back in March, an unprecedented decision was made to release 400 million barrels from emergency reserves, but this is merely a ‘painkiller,’ not a cure. The only real solution to the problem is the opening of the Strait of Hormuz”, emphasized the head of the IEA.
According to the head of the IEA, Asia has already been hit the hardest, but shortages of diesel and jet fuel are spreading to Europe as well. The situation is further complicated by the fact that electricity prices in the EU will rise, as they are linked to the cost of natural gas.
On the other hand, the crisis of 2026 served as a powerful catalyst for rethinking energy strategies. In particular, Paolo Frankl (Head of the Renewable Energy Division at the IEA), during a Global Bioenergy Partnership (GBEP) webinar, noted that current events are a powerful driver toward diversification and energy security, especially for the transportation sector.
The IEA’s Oil Market Report (OMR) is one of the world’s most authoritative and up-to-date sources of data, forecasts, and analysis on the global oil market. It contains detailed statistics and commentary on supply, demand, stocks, prices, and oil refining, as well as oil trade in IEA member countries and selected non-IEA countries.
