April Will Be Worse Than March. The IEA Said So. Here Is What That Means.

The International Energy Agency forecast a deeper supply disruption in April than March, citing continued Hormuz restrictions and declining OPEC spare capacity. Photo: iStock.

Geopolitical

April Will Be Worse Than March. The IEA Said So. Here Is What That Means.

Apr 2, 2026 4 min The Geopolitical Desk

The Brief

IEA Executive Director Fatih Birol warned the energy crisis will be much worse in April than March, because pre-war cargo shipments that transited the Strait before the conflict are now arriving at their final ports with nothing behind them.
The IEA has characterized this as the greatest global energy security challenge in history, with 12 million barrels per day of supply lost, more than double the disruptions of either the 1973 or 1979 oil crises combined.
Brent crude is now above $108 per barrel, with BCA Research estimating total lost supply will double from 4.5 to 5 million barrels per day to roughly 9 to 10 million by mid-April.
Industry executives at CERAWeek warned the window to avoid a dramatically worse outcome is roughly two to three weeks, with Chevron and Shell CEOs both confirming that supply disruptions are spreading from Asia to Europe.
For Canadian portfolios, the deepening supply crunch supports energy equity valuations but raises stagflation risk, the most difficult macro environment for balanced multi-asset portfolios.

Five weeks into the Iran war, the world is only now beginning to feel the full physical weight of the Strait of Hormuz closure. In March, cargo ships that had transited the strait before the conflict was declared continued arriving at ports across Asia, Europe, and the Americas, providing a buffer that masked the true scale of the disruption. That buffer is gone. IEA Executive Director Fatih Birol told the "In Good Company" podcast this week in plain terms: "In April, there is nothing." The implication for energy markets, and by extension for every balanced portfolio with exposure to equities, bonds, and currencies, is significant.

Birol's framing was unambiguous. The supply disruption caused by the Hormuz closure now exceeds 12 million barrels per day, more than twice the volumes lost in either the 1973 Arab oil embargo or the 1979 Iranian Revolution, each of which caused global recessions. The IEA has described the situation as the "greatest global energy security challenge in history." Strategic reserve releases, including the largest coordinated release on record, provide breathing room but, as Birol noted, "will not be a cure. The cure is opening up the Strait of Hormuz."

The Physical Pipeline Is Empty

The mechanism Birol described is straightforward but easy to underestimate. Oil and LNG cargoes that loaded in the Gulf before February 28 took weeks to reach their destinations. Those ships have now arrived. The next wave of cargoes never loaded, because the strait was effectively closed by March 4. Asian refineries, which typically receive 75% of Gulf oil and LNG exports, are now operating on inventories built before the war. Rystad Energy analyst Matt Bernstein told CBS News this week that even if the conflict wound down in the next few weeks, "there is no going back to pre-war normal," pointing to higher geopolitical and financial risks around Gulf trade that will persist regardless of when the strait reopens.

The demand destruction this will cause is already visible. Pakistan has told cricket fans to watch games from home to preserve fuel. Shortages have been reported across Thailand. Hundreds of Australian petrol stations have reported fuel shortfalls. South Korea has enacted a five-month restriction on naphtha exports. Consultant FGE NexantECA estimates Asian demand has already fallen by nearly 2 million barrels per day in March, a reduction that will deepen in April as inventories thin further.

THE MID-APRIL DEADLINE Geopolitical strategist Marko Papic of BCA Research has put a specific timeline on the deterioration. Total lost supply will roughly double by mid-April, from 4.5-5 million barrels per day to approximately 9-10 million, as the pipeline of pre-war cargo runs out globally. Oil executives at CERAWeek were equally direct. Chevron CEO Mike Wirth described "very real, physical manifestations of the closure of the Strait of Hormuz that are working their way around the world." Shell CEO Wael Sawan confirmed that disruptions that began in South Asia have "moved to Southeast Asia, Northeast Asia and then more so into Europe as we get into April."

The U.S. and IEA have responded with the largest coordinated strategic reserve release on record, some 400 million barrels, and the U.S. temporarily lifted sanctions on 30 Russia-connected petroleum tankers carrying 19 million barrels of oil to ease physical market pressure. These measures buy time but do not resolve the fundamental problem: the strait carries 20 million barrels of oil per day under normal conditions, and no combination of reserve releases and rerouted pipeline flows can offset that volume indefinitely.

Canadian Portfolio Implications

The IEA's warning lands differently in Canada than in most other G7 countries because Canada is a net energy exporter. Higher sustained oil prices improve the cash flows of Canadian energy producers operating in a jurisdiction entirely unaffected by the conflict. Canadian Natural Resources, Suncor, and Cenovus, all with oil sands assets that are long-life and low-decline, benefit directly from Brent prices above $100/barrel. The TSX energy sector is up approximately 42% over the past 12 months as a result.

The risk is the macro overlay. Nobel Prize-winning economist Paul Krugman told CBS News this week that "$150 oil is not hard to tell a story for, and $200 is not crazy." At those levels, global demand destruction becomes severe, Chinese industrial activity contracts sharply, and the recession risk in Canada's major trading partners rises materially. A portfolio that benefits from higher energy prices in the short term can still be hurt significantly by a global growth shock in the medium term. The stagflation scenario, rising prices combined with slowing growth, is the most difficult environment for balanced multi-asset portfolios and the one most investors are not positioned for.

SOURCES IEA (Fatih Birol, "In Good Company" podcast), CNBC, CBS News (Paul Krugman, Matt Bernstein/Rystad Energy), Bloomberg, S&P Global CERAWeek (Chevron CEO Mike Wirth, Shell CEO Wael Sawan), BCA Research (Marko Papic), FGE NexantECA, Wikipedia (Economic impact of 2026 Iran war), Lloyd's List Intelligence, Kpler, Congress.gov CRS Report

Educational content only. This article is published for informational and professional development purposes. It does not constitute investment advice, financial planning advice, or a recommendation to buy or sell any security. Canadian advisors should apply their own professional judgment. Full disclaimer.

Advisor Toolkits — Apr 2, 2026

🛡️ Respond ▼

What They're Feeling

Clients are beginning to grasp that this is not a short-term disruption. The IEA's language is jarring when it reaches clients via news alerts. Those with Canadian energy holdings may feel conflicted: their positions are working but the macro framing is frightening. Clients without energy exposure feel unprotected. The $150-$200 oil commentary circulates widely and triggers alarm even among clients who do not fully understand what it means for their specific holdings.

What to Say

"The IEA made a point this week that I want to walk you through, because it helps explain why this situation feels different from prior Middle East events. In March, the world was still running on oil that had already been loaded onto ships before the war started. Those ships have now arrived. April is the first month where the physical supply chain is truly empty. That is why the IEA's director said April will be worse than March. Now, what does that mean for your portfolio? Canadian energy holdings benefit from this, that part is straightforward. The more important question is whether a sustained oil shock at these levels slows global growth enough to hurt the broader equity exposure you hold. That is what we are watching: not the oil price itself, but whether it triggers a global slowdown. We are not there yet, and the consensus view is that a ceasefire in the next few weeks would prevent that outcome. But the risk window is real, and I want to make sure you understand it."

Who's Affected

High impact: Clients with significant global equity exposure, particularly in Asia-linked sectors including technology, industrials, and consumer discretionary. Clients with direct energy equity holdings who are navigating whether to trim gains or hold through further upside. Mixed impact: Balanced Canadian portfolio holders who have energy as a natural hedge but face simultaneous pressures on their fixed income and global equity sleeves. Indirect exposure: Clients in agriculture or food-related equities, given the strait's role in fertilizer supply chains.

Action Checklist

Review clients with significant Asia-Pacific or emerging market equity exposure for concentration risk from the demand destruction scenario

For clients with energy positions, document the current thesis and define in advance at what point a trim conversation becomes appropriate

Clients who ask about $150 or $200 oil scenarios should be walked through the demand destruction dynamic, at those prices global growth slows sharply

Watch for the mid-April physical supply tightening Papic described, that is the next major observable milestone in the crisis trajectory

Flag for agricultural or food-related business owner clients that fertilizer supply disruption is a slow-moving but real consequence of the Hormuz closure

Follow-Up Email Template

Subject: Why April matters more than March for energy markets

I wanted to share some context on a development that I think clarifies why the current energy situation feels more serious than earlier in the conflict. The head of the International Energy Agency made an important observation this week: in March, the world was still receiving oil that had been loaded onto ships before the Strait of Hormuz closed on March 4. Those shipments have now arrived at their destinations. In April, there is genuinely nothing behind them. The physical pipeline of pre-war cargo is exhausted. This is why the IEA described April as "much worse" than March, and why oil executives at major industry conferences this week were warning that the window to prevent a deeper crisis is closing. For your portfolio, the key risk to watch is not the oil price itself, but whether a sustained shock at these levels triggers a broader global growth slowdown.

Compliance note: All scripts, checklists, and templates are provided for educational and professional development purposes only. They do not constitute approved marketing materials. Advisors are responsible for ensuring all client communications comply with applicable CIRO rules, provincial securities legislation, and their firm's compliance policies. Customize all templates before use. HDQ accepts no liability for the use of these materials.

🎯 Prospect ▼

Client Profiles to Target

High-priority: Investors with no energy exposure who are watching Canadian energy stocks surge and questioning whether their portfolio is positioned correctly. DIY investors who understand the headlines but have no framework for translating "IEA warns of worst crisis in history" into a specific portfolio action. High net worth individuals with large global equity allocations and no natural Canadian energy hedge. Medium-priority: Clients in or near retirement who are running mental models of what $150 oil means for their spending power. Business owners in transportation, agriculture, or manufacturing.

Opening Line

"Hi [Name], I wanted to reach out because the IEA said something important this week that most people missed in the broader noise. The reason April is going to feel worse than March in terms of energy prices is that the world was still running on pre-war oil shipments in March. Those are gone now. I can explain in about five minutes what that means for a Canadian portfolio specifically, and whether where you are positioned makes sense given what is coming. Do you have a few minutes?"

Value Proposition

Most investors conflate "oil going up" with "everything energy-related is good." The nuance, which distinguishes a professional from a news-reader, is understanding where the benefit ends and the systemic risk begins. A client who hears that $200 oil is possible but has no framework for what that does to global growth, their equity sleeve, their fixed income, and their purchasing power is making allocation decisions with an incomplete map.

Discovery Questions

How much of your portfolio is currently in Canadian energy versus global equities, and do you know how that split is performing right now?
When you hear that the IEA says this is the worst energy crisis in history, what does that make you want to do with your investments?
Have you thought about what sustained $150 oil would mean for companies you hold outside the energy sector?
Is your portfolio designed to benefit from the current environment, or is it built for a different set of assumptions that no longer apply?
Do you have someone helping you separate the signal from the noise right now, or are you making sense of this on your own?

Prospecting Email Template

Subject: The IEA says April will be worse. Here is what that means for Canadian investors.

I wanted to share something from this week that I think is being underappreciated in the broader coverage of the Iran conflict. The head of the International Energy Agency confirmed Wednesday that the global oil supply crunch will intensify significantly in April. The reason: in March, the world was still receiving oil that had been loaded onto ships before the Strait of Hormuz closed. Those shipments are now exhausted. In April, there is genuinely nothing behind them. For Canadian investors, this cuts in two directions. Canadian energy companies benefit directly from sustained high oil prices. But at the level of $150 or $200 oil that some economists are now discussing, global demand destruction becomes a serious risk. Understanding which parts of your portfolio benefit, which are exposed, and what to watch for next is the kind of analysis that is genuinely difficult to do without a framework. If you would find it useful to talk through where you stand, I am happy to set aside 20 minutes this week.

Compliance note: Prospecting communications are subject to CIRO rules on client communications and applicable anti-spam legislation (CASL). Ensure you have appropriate consent before sending unsolicited communications. All templates must be reviewed and approved by your firm's compliance department before use. HDQ accepts no liability for the use of these materials.