Global energy markets are entering a period of prolonged uncertainty as supply disruptions linked to the Middle East conflict begin to deepen, with recovery expected to take years rather than months.

The warning comes from Fatih Birol, who said the full impact of the crisis is only now starting to emerge.

Birol, who heads the International Energy Agency, said in an interview with the Neue Zuercher Zeitung newspaper that the recovery timeline will vary across countries.

However, the overall outlook remains prolonged.

“That will vary from country to country. In Iraq, for example, it will take much longer than in Saudi Arabia. However, we estimate it will take approximately two years overall to reach pre-war levels again,” Birol said, as cited in a Reuters report.

His remarks highlight the uneven pace of recovery across major oil-producing nations affected by the ongoing conflict.

Strait of Hormuz disruption seen as key risk

Birol further warned that markets may be underestimating the potential consequences of a prolonged disruption in the Strait of Hormuz.

The waterway is a critical route for global oil and gas shipments, and any extended closure could significantly disrupt supply chains.

According to Birol, the immediate impact of the conflict has been partially cushioned by shipments that were already en route before hostilities escalated in Iran.

These deliveries have now reached their destinations, temporarily easing supply concerns.

However, he pointed to a growing supply gap that is beginning to emerge.

“But no new tankers were loaded in March. There were no new deliveries of oil, gas, or fuels to Asian markets. This gap is now becoming apparent. If the Strait of Hormuz is not reopened, we must prepare for significantly higher energy prices,” Birol said, as reported by Reuters.

Supply gaps begin to surface in global markets

The absence of new shipments in March has started to expose vulnerabilities in global energy supply, particularly in Asian markets that rely heavily on imports from the Middle East.

Birol’s comments suggest that while short-term disruptions were masked by earlier shipments, the lack of fresh supply is now becoming more visible.

This emerging gap could tighten global markets and increase price volatility if supply routes remain constrained.

IEA considers further emergency action

Birol also addressed the possibility of additional intervention by the IEA through emergency oil stock releases, following a move in March.

When asked whether the agency could initiate another release, he indicated that the option remains under active consideration.

His statement signals that while no immediate action has been taken, the agency remains prepared to respond if market conditions worsen.

Outlook remains uncertain

The comments from the IEA chief underscore ongoing uncertainty in global energy markets.

Recovery timelines remain unclear, and much will depend on how the geopolitical situation evolves, particularly around key supply routes.

For now, the combination of delayed production recovery, disrupted shipping routes, and emerging supply gaps points to continued pressure on global energy prices in the near term.

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President Donald Trump said prospects for a deal with Iran are improving, signaling potential progress in geopolitical tensions.

Oil prices moved higher as supply concerns persisted despite ongoing negotiations.

Bitcoin pulled back after failing to break key resistance, while the White House advanced plans to provide Anthropic’s AI model to federal agencies amid cybersecurity concerns.

Trump signals progress in US-Iran deal talks

President Donald Trump said prospects for a deal with Iran are “looking very good,” raising hopes that ongoing negotiations could extend a fragile truce.

“It’s looking very good that we’re going to make a deal with Iran, and it’s going to be a good deal,” Trump told reporters, adding that talks could resume as soon as this weekend.

Trump said Iran may have agreed to key conditions, including abandoning ambitions for a nuclear weapon and allowing oversight of nuclear material, though Tehran has not confirmed these claims. He also pointed to provisions involving “free oil” and reopening the Strait of Hormuz.

“They’ve agreed to almost everything,” Trump said. “They got to get to the table with a pen.”

The optimism contrasts with views from Gulf Arab and European leaders, who expect a deal to take months.

Meanwhile, Trump also announced a 10-day ceasefire between Israel and Lebanon, aimed at easing broader regional tensions.

Crude oil rises as supply concerns persist

Oil markets remained on edge, with prices climbing as uncertainty around supply disruptions continued to dominate sentiment.

Brent crude rose more than 3% to around $98.62 per barrel, while West Texas Intermediate traded above $93.

The gains came despite hopes that diplomatic efforts could eventually restore flows through the Strait of Hormuz, a critical artery for global energy shipments.

“The forward curves for Brent, and to a lesser extent WTI, continue to show backwardation, in other words, short-term supply issues which ease up over the rest of the year,” said David Morrison, senior market analyst at Trade Nation.

“But this backwardation is not as steep, or indeed as regular as it was a week ago. That suggests some nuances are coming back into pricing, which also suggests that the overall situation may be considered clearer than it was recently.”

The conflict has significantly disrupted global energy markets, with estimates suggesting around 13 million barrels per day of supply has been affected.

Bitcoin trades above $75,000

Bitcoin posted gains to trade above the $75,000 level.

The cryptocurrency reversed its drop from around $73,500 to trade at the $75,000 level, posting a 0.19% gain in the last 24 hours.

The $75,000-$76,000 is an important resistance zone for Bitcoin and breaking above it is crucial for further upside.

Robinhood shares fell while companies like Coinbase and Strategy gained as the top cryptocurrency posted modest gains.

The positive move came after US indices hit a fresh intraday high on Thursday.

White House moves to expand access to Anthropic AI model

The White House is preparing to make a version of Anthropic’s advanced AI model, Mythos, available to federal agencies, said a Bloomberg report.

Gregory Barbaccia, federal chief information officer, said officials are developing safeguards before any rollout.

“We’re working closely with model providers, other industry partners, and the intelligence community to ensure the appropriate guardrails and safeguards are in place before potentially releasing a modified version of the model to agencies,” Barbaccia wrote.

The model has been limited to select organizations due to concerns it could be misused by hackers. Officials have warned it could significantly enhance the ability to identify vulnerabilities in critical systems.

The move underscores the dual-use nature of advanced AI, offering both defensive cybersecurity benefits and potential risks if deployed without sufficient controls.

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A senior official at the US Federal Reserve signalled a more cautious stance on interest rate cuts, as inflation remains persistent and geopolitical tensions add uncertainty to the economic outlook.

Stephen Miran, widely seen as one of the most dovish policymakers at the central bank, said on Thursday that he may scale back expectations for how quickly rates should decline.

Speaking at an economic forum in Washington, Miran said inflation dynamics had become “a little bit less favourable” even before the war involving Iran drove up global oil prices.

He noted that he had already reduced his projection for rate cuts by the end of 2026 from six to four during last month’s policy meeting.

“I might have three (rate cuts), I might have four, I haven’t made up my mind,” Miran said, referring to his current outlook.

Inflation persistence complicates policy path

Miran’s revised stance reflects growing concern within the Federal Reserve about the persistence of inflation.

A key measure of US price increases is expected to reach 3.2% as of March, remaining well above the Fed’s 2% target.

Despite this, Miran said he still expects inflation to move closer to the target over the next year.

“I think we’ll net out to being pretty close to target a year from now,” he said.

He added that he would still support a rate cut at the Federal Reserve’s upcoming April 28–29 meeting, citing concerns about a slowing labour market.

At the same time, Miran acknowledged that recent developments in energy markets have altered the balance of risks.

“The energy developments have changed the distribution of risks … and they’ve increased the risks of higher inflation,” he said.

War adds uncertainty to Fed outlook

The comments underscore how the Middle East conflict has complicated an already uncertain monetary policy environment.

Miran’s views have often aligned with US President Donald Trump’s calls for aggressive rate cuts.

However, his latest remarks suggest even the most dovish voices within the Fed are reassessing their positions.

Trump has expressed confidence that his nominee for Federal Reserve chair, Kevin Warsh, would pursue lower interest rates.

Yet, support among policymakers for immediate and significant cuts remains limited.

Market expectations also reflect a more restrained outlook.

Investors are pricing in the possibility that the Fed’s benchmark rate—currently in the 3.50%–3.75% range—could remain unchanged until as late as mid-2027.

Rising energy costs feed inflation pressures

Separately, John Williams, President of the Federal Reserve Bank of New York, said the war is already contributing to higher inflation through rising energy prices.

“Developments in the Middle East are driving significant increases in energy prices, which are already lifting overall inflation,” Williams said in remarks at the Federal Home Loan Bank of New York 2026 Member Symposium.

He noted that the trajectory of inflation will depend on the duration of the conflict.

A swift resolution could ease pressures, but a prolonged war could trigger a broader supply shock.

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