The International Energy Agency warned that oil prices will climb further as futures markets fail to capture the depth of supply disruptions in the Middle East. This signals a tightening that could affect drilling and refining operations worldwide. The war in the Middle East has cut oil output by up to 13 million barrels per day and damaged more than 80 key facilities, creating a deep and worsening supply crunch. Physical markets are now extremely tight, with record spot prices and refiners cutting runs as shortages hit Europe and Asia. IEA said exports of crude plus refined products have slumped by an estimated 20 million barrels, and that Middle Eastern production is down by 9.3 million barrels daily compared with a year earlier, a 57 % supply squeeze. Nomura warned that an additional loss of 2.3 million barrels per day could occur in March. The agency also announced it would coordinate an emergency release of 400 million barrels from OECD stocks, the largest such release in its history. Birol noted that prices are already high but do not reflect the severity of the problem, and that they will soon converge with physical markets. Energy Aspects analyst Nic Dyer said that refiners in Europe and the US will cut runs from next month to share the pain of the shortage. JP Morgan ’s Natasha Kaneva observed that signs were emerging of increasing strain as European and Asian refiners compete aggressively for the remaining cargoes, driving spot Brent to record highs. While the emergency release should ease some pressure, the continued supply crunch and the potential for further output losses mean that oil markets will likely remain volatile. Drilling and refining operations must prepare for tighter inventories and possible run reductions as the market adjusts to the new supply reality.