CANBERA (dpa-AFX) - The International Energy Agency chief has warned that the world is facing the worst energy crisis and that the global economy is facing a major threat as a consequence of the ongoing Middle East war.
Speaking at a media event at the National Press Club of Australia on Monday, IEA Executive Director Fatih Birol said the situation is worse than the two oil crises in the 1970s, and the gas market crash following Russia's invasion of Ukraine in 2022.
'This crisis as things stand is now two oil crises and one gas crash put all together,' he told reporters in capital Canberra.
'And not only oil and gas, some of the vital arteries of the global economy, such as petrochemical, such as fertilizers, such as sulfur, such as helium, their trade is all interrupted, which would have serious consequences for the global economy,' Birol said.
Asia will be the worst-affected due to its reliance on the Strait of Hormuz, according to him.
The 24-days-old Middle East war has impeded energy trade flows through the Strait, creating the largest supply disruption in the history of the global oil market. Global supply of liquefied natural gas has also been reduced by around 20 percent due to the situation.
Crude and oil product flows through the Strait of Hormuz have plunged from around 20 million barrels per day before the war to a trickle currently. With traffic halted, limited capacity to bypass the crucial waterway, and storage filling up, Gulf countries have cut total oil production by at least 10 mb/d, according to IEA's latest Oil Market Report. In the absence of a rapid resumption of shipping flows, supply losses are set to increase.
Birol said the agency is in touch with countries including Canada and Mexico to increase oil production and release into the global market.
'We have stocks and we are incentivizing many countries with refineries to move faster than they normally do.'
He added that IEA was consulting with governments and more stocks could be released from oil reserves if necessary.
'If needed, we can put more oil in the markets, both crude oil and products,' he said. 'Our stock release will help to comfort the markets, but this is not the solution. It will only help to reduce the pain and the economy.'
At least 44 energy facilities across nine countries in the Middle East were seriously damaged in indiscriminate attacks, according to Birol.
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