Oil prices continue to fall on hopes of new US-Iran peace talks

While prices have retreated from $100 a barrel, crude oil is still far more expensive than it was before the Iran war began on 28 February when it stood at about $73.

IEA executive director Fatih Birol said: "April may well be even worse than March, because during the month of March, we have already received cargoes which were loaded well before the crisis started... and during the month of April, nothing is being loaded.

"The longer the disruption is, the more severe the problem becomes."

In its latest monthly report, the IEA said global oil supplies had seen their "largest disruption in history" in March, falling by 10.1 million barrels per day (mb/d) to 97 mb/d.

Last month, all 32 members of the IEA agreed to release 400 million barrels of their oil stocksto ease supply constraints and Birol signalled that the agency would be prepared to act again.

"Four hundred million barrels is only 20% of our resource," he said. "We have still 80% in our pocket. We are assessing the decision. If and when we decide it is the time, we are ready to act and act immediately."

Oil traders are also weighing how the US blockade will affect global energy supplies, said Rahman Daiyan, an energy resources researcher at the University of New South Wales in Sydney.

Only a "modest" amount of the global oil supply comes directly from Iran, but prices will rise if the US blockade escalates the conflict and affects other shipments from the Gulf, Daiyan added.

Some companies expect higher oil prices to boost their business.

On Tuesday, oil giant BP said it expected its trading division to report "exceptional" results for the January to March period.

It marks a dramatic turnaround from the final three months of 2025, when BP said the contribution from oil trading was "weak".

Asian stock markets rose on Tuesday. The Nikkei 225 index in Japan ended the day up 2.4% while South Korea's Kospi exchange closed 2.7% higher.

Countries in Asia that are heavily reliant on energy from the Gulf have been hit hard by the fallout of the Iran war.

The Strait of Hormuz has become a key flashpoint of the conflict after Iran retaliated against US-Israeli strikes since 28 February by threatening to attack vessels that try to use it.

Energy prices have surged as nearly a fifth of global oil and gas shipments usually pass through the strait.

On Monday, US Department of Energy Secretary Chris Wright said he expected oil prices to peak in the coming weeks as the waterway remains effectively closed.

"We're going to see energy prices high - and maybe even rising - until we get meaningful ship traffic through the Strait of Hormuz," Wright told the Semafor World Economy Forum in Washington.

"That'll probably hit the peak oil price at that time. That's probably sometime in the next few weeks."