The return of fighting between the United States and Iran threatens to extend the global energy crisis, the International Energy Agency has warned.The risk that the resumption of hostilities could scupper hopes of a swift recovery in energy markets was flagged by the United Nations agency on Friday.Recommended Stories list of 3 itemsend of listThe warning came as a lull in action from US and Iranian forces appeared to pave the way for efforts to revive diplomacy, although sources cautioned that the US military remains ready to resume attacks.World oil demand is on track to fall this year for the first time since 2020, the IEA said in its latest monthly oil market report, as the conflict continues to disrupt production and exports across the Middle East.A recovery had been under way on the strength of last month’s US-Iran memorandum of understanding, the agency said, but it cautioned that renewed escalation could complicate the outlook further.The latest round of fighting this week was triggered by rival interpretations of provisions governing the Strait of Hormuz in the MoU. The waterway, before the conflict erupted in April with US and Israeli strikes on Iran, carried roughly a fifth of the world’s oil and liquefied natural gas exports.The IEA reported that the effective closure of Hormuz had cut as much as 14 million barrels per day (bpd) of crude oil flows. The fuel shortage and increase in prices have hit the global economy hard.The UN agency said that following the agreed MoU and reopening of the strait, global oil supply rose by 4.1 million bpd in June, although supply remained 9.4 million bpd below pre-war levels. Advertisement Based on an assumption that the strait would return to full operation, the IEA had forecast a 4.62 million bpd surplus in global sup …
