IEA: Middle East energy production may take two years to recover to pre-war levels

International Energy Agency (IEA) Executive Director Fatih Birol said on Friday that Middle East energy production may take around two years to return to pre-war levels, while signaling that further emergency stock releases remain under consideration. The recovery would vary across countries, with Iraq likely taking longer than Saudi Arabia, although the region overall could return to pre-war output in about two years, Birol said in an interview with Switzerland's German-language daily Neue Zurcher Zeitung.

Hormuz reopening key

He said production would improve significantly once the Strait of Hormuz reopens, but reaching full capacity would still take time. Birol stressed that reserve releases can only ease short-term bottlenecks, noting that the most important step for stabilizing energy supply is the reopening of the Strait of Hormuz. Any move that helps reopen the waterway would be positive, he added.

Emergency reserves

The IEA stands ready to act again if needed after releasing 400 million barrels from emergency reserves in March, the largest drawdown in the agency's history, Birol added. He said another release was not yet necessary, but remained under active consideration as the agency monitors markets closely.

Infrastructure damage

Birol also said the IEA is tracking widespread damage to regional energy infrastructure, warning that markets should not expect an immediate return to normal even after the strait reopens. More than 80 energy facilities in the Middle East have been damaged since Feb. 28, with over one-third classified as severely or very severely hit.