Global Energy Agency Warns of Biggest Energy Crisis Ever and Asks People to Work From Home
The IEA is urging households worldwide to work from home, take public transport and lower their heating, though the Dutch cabinet says it will not be following the recommendations.
The International Energy Agency has issued its starkest warning yet about the global energy situation, declaring the war in the Middle East has triggered the largest supply disruption in the history of the world oil market and calling on governments, businesses and ordinary people to cut their energy use.
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What the IEA said
The IEA describes the disruption as the biggest ever seen on the global oil market, with the Strait of Hormuz now virtually completely blocked by Iranian measures. The agency warned that without a quick resolution, the consequences for energy markets and economies will keep getting worse.
IEA director Fatih Birol said the Iran war has caused a bigger supply disruption in volume terms than the 1973 oil crisis, which was itself the event that prompted the founding of the IEA. "As the world's energy authority, the IEA is doing everything possible to support the stability of energy markets," Birol said.
What the IEA is recommending
The agency has published a list of practical measures it says can be applied quickly. These include working from home where possible to cut commuting fuel use, lowering motorway speed limits by at least 10 kilometres per hour, encouraging a shift from cars to public transport, restricting car access to large cities on alternating days, and promoting carpooling and fuel-efficient driving.
The IEA also advises cooking with electric appliances rather than gas, and says industries in countries where gas supplies are under pressure should consider switching from LPG to alternative fuels.
The Strait of Hormuz, a narrow waterway between Iran and Oman, is the route through which roughly 20 percent of the world's daily oil consumption normally passes. According to the IEA, around 20 million barrels of crude oil and oil products pass through it each day under normal circumstances. Since the start of the conflict, tanker traffic has fallen to near zero.
The Dutch cabinet will not follow the advice
Multiple Dutch ministers said ahead of the weekly cabinet meeting that the government does not intend to adopt the IEA's recommendations. Ministers indicated there are no energy shortages in the Netherlands at present. No fuel duty reduction is planned in the short term either.
Despite this, fuel prices at Dutch pumps have continued to climb. The advised retail price for a litre of Euro95 petrol reached 2.57 euros on Friday, while diesel stood at 2.65 euros, both at record levels.
The IEA's 32 member countries, including the Netherlands, last week released a combined 400 million barrels of oil from strategic emergency reserves, the largest such release in the organisation's history. The move was intended to calm markets but has not yet succeeded in bringing prices down, as the conflict has continued to escalate.
Air France-KLM prepares for fuel shortages
Air France-KLM CEO Ben Smith told the Financial Times that the aviation group is preparing for possible fuel shortages on return flights from Southeast Asia, a region far more dependent on Gulf fuel than Europe. "We are working on scenarios for how to deal with fuel shortages," Smith said. "We can get fuel in Europe, but if we go to a Southeast Asian city, we might not be able to fly back."
Some other European countries are taking more direct action. Italy has already announced a reduction in fuel duties of 25 cents per litre, and Spain is reported to be planning similar cuts.
