The International Energy Agency (IEA) warned Friday that Middle East oil production may take two years to reach pre-crisis levels. Executive Director Fatih Birol cited recent military escalations as the primary cause for disrupted output and shipments.
Birol noted that restoration of capacity remains a long-term challenge with varying recovery times by country. Markets are currently failing to price in the potential impact of a prolonged Strait of Hormuz closure.
A failure to reopen this shipping lane could trigger a sharp increase in global energy prices. Energy producers, including those in the VDE ETF, face sustained supply tightness and price volatility.