Global energy shock: 11 million barrels lost daily as IEA Chief warns of 'very severe' crisis
Sydney:The head of the International Energy Agency (IEA) issued a dire warning Monday, stating that the intensifying war in the Middle East could trigger the most profound energy crisis in decades.
Speaking at the National Press Club in Australia’s capital, Fatih Birol characterised the current situation as "very severe," noting that the scale of the disruption has already eclipsed the historic oil shocks of the 1970s.
"Many of us remember the two consecutive oil crises in the 1970s... at that time, in each of the crises, the world has lost about five million barrels per day, both of them together, 10 million barrels per day," Birol said. "As of today, we lost 11 million barrels per day, so more than two major oil shocks put together."
A Universal Economic Threat
The IEA chief emphasised that the global economy is facing a "major threat" due to the hostilities. He warned that the interconnected nature of modern markets means that "no country will be immune" to the fallout if the conflict continues on its current trajectory.
"The global economy is facing a major, major threat today, and I very much hope that this issue will be resolved as soon as possible," Birol said, adding that there is an urgent "need for global efforts" to stabilise energy flows.
Damage to Regional Infrastructure
Beyond the loss of supply from the blocked Strait of Hormuz, Birol revealed that the physical toll on energy infrastructure has been extensive. He noted that the war has resulted in at least 40 energy assets being "severely or very severely" damaged.
"At least forty... energy assets in the region are severely or very severely damaged across nine countries," Birol told the audience, highlighting the difficulty of a rapid recovery even if a ceasefire were reached.
The IEA has already coordinated the largest emergency oil stock release in its history—400 million barrels—to mitigate the impact, but Birol suggested that further measures may be necessary as the crisis deepens.
With inputs from AFP