Aletho News

Persian Gulf oil production can take two years to recover from war: IEA chief

The Cradle | April 17, 2026

It could take up to two years for oil production in West Asia to return to levels from before the start of the US-Israel war on Iran in late February, Fatih Birol, executive director of the International Energy Agency (IEA), told Bloomberg on 17 April.

“There is a general belief that the minute we see the strait open … we come back to the level of production before – which is, in my view, misleading,” Birol stated.

West Asia oil production was disrupted by the US-Israeli bombing campaign, which targeted Iranian oil and energy infrastructure.

Iran retaliated by targeting Gulf oil and gas infrastructure. It also threatened to target ships linked to the “enemy” in the Strait of Hormuz, effectively closing the waterway through which most Gulf oil is exported.

“The recovery will be gradual as damage from the conflict has affected oil fields, refineries, and pipelines across the Persian Gulf,” Birol said.

The IEA chief emphasized that the effective closure of Hormuz has caused world markets to lose hundreds of millions of barrels of crude and refined fuels.

The full resumption of liquefied natural gas (LNG) production could take even longer, with some terminals taking more than two years to repair after suffering damage in attacks, Birol added.

If a resolution to the conflict is not reached soon, energy-importing emerging economies, especially in Asia and Africa, will be hardest hit, Birol warned.

He added that early signs of demand destruction are already visible, including rationing and reduced activity, which could further reduce oil demand moving forward.

Meanwhile, US oil and gas exports have soared since the beginning of the war. Reuters reported on 15 April that the US has nearly become a net crude exporter for the first time since World War II as Asian and European buyers scramble to replace oil supplies lost due to the Iran war.

The difference between US oil imports and exports narrowed to 66,000 barrels per day (bpd) last week, the lowest on record, according to US government data. At the same time, exports reached 5.2 million bpd, the highest in seven months.

Reuters noted, however, that the US is rapidly approaching its maximum export capacity.

Iran has also increased its oil exports amid the conflict, boosting daily loadings and exports to around 2 million barrels over the past three months.

China has stepped up its purchases of Iranian crude by more than 300,000 bpd to a total of 1.6 million bpd.

Since the war began, India has resumed oil purchases from Iran, receiving at least 2 million barrels this month. New Delhi had halted its purchases of Iranian crude in 2019.

Iranian crude has recently been sold to some Chinese buyers at prices even higher than the Brent benchmark, which marks a reversal from before the war, when Iran was forced to sell oil to China at a discount due to US sanctions.

April 17, 2026 - Posted by aletho | Economics, Wars for Israel | China, Iran, Middle East, United States