IEA Chief Warns of Global Economic Threat Amid Middle East Energy Turmoil
Escalating Tensions Trigger Largest Oil Supply Disruption
New Delhi, March 23 – The International Energy Agency (IEA) chief, Fatih Birol, has issued a stark warning that the global economy faces a significant threat due to the escalating energy turmoil stemming from tensions in the Middle East.Mr. Birol stated that the current situation in West Asia poses serious risks to economies worldwide. “The global economy is facing a major threat today, and I sincerely hope that this issue will be resolved as soon as possible,” he said during a media event in Australia. “The fallout will not be limited to a few economies, and ‘no country will be immune to the effects of this crisis’,” he added.
The conflict has triggered the largest supply disruption in the history of the global oil market. Shipping through the Strait of Hormuz, a critical waterway carrying approximately 20 per cent of global oil consumption, has been reduced to a trickle.
Around 20 million barrels per day of crude oil and oil products typically transit the Strait.
Iran’s Foreign Ministry has stated that the Strait of Hormuz is not blocked, and navigation continues in the waterway. The ministry indicated that Iran has always respected the freedom of navigation and maritime security and safety, emphasizing its commitment to upholding these principles.
Last week, the IEA outlined a range of demand-side actions, including encouraging remote work and reducing air travel, for governments, businesses, and households to mitigate the economic impact on consumers. Immediate actions to reduce demand include working from home where feasible, displacing oil use from commuting, and exploring alternative cooking solutions to lessen reliance on LPG.
“The war in the Middle East is creating a major energy crisis, including the largest supply disruption in the history of the global oil market,” Birol stated. “In the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe.”
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