The International Energy Agency said supply-side measures alone cannot “fully offset” the energy crisis unleashed by the conflict in the Middle East as it called on consumers to reduce demand.
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The International Energy Agency (IEA) is calling on consumers to do their part to ease the energy crisis unleashed by the US-Israel war on Iran.
The conflict, which has quickly spread to other countries in the Middle East, has triggered the largest supply disruption in the history of the global oil market, the IEA said in a report on Friday. Iran has effectively blocked traffic in the Strait of Hormuz, one of the world’s busiest oil shipping channels. Some 20-25% of global oil supply typically passes through it, making it a critical global energy chokepoint.
The passage’s closure has sent crude oil prices above $100 per barrel and has driven even sharper increases in refined products such as diesel, jet fuel, and liquefied petroleum gas (LPG), the IEA said. Member states of the agency, which include the US, UK and Japan, agreed to release a record 400 million barrels of oil from emergency reserves to ease pressure.
But, the agency said, “supply-side measures alone cannot fully offset the scale of the disruption,” calling on consumers to play their part.
In the report, the IEA identifies 10 measures that governments, businesses, and households can implement, addressing road transport, air travel, and industry. These include working remotely where possible, cutting highway speed by at least 10 km/h, switching from stove to electric cooking, carrying out vehicle maintenance and optimizing load to cut vehicle diesel needs as well as opting for alternatives to air travel, if available.
Immediate actions to reduce demand recommended by the IEA (click to view)
1. Work from home where possible
Displaces oil use from commuting, particularly where jobs are suitable for remote work.
2. Reduce highway speed limits by at least 10 km/h
Lower speeds reduce fuel use for passenger cars, vans and trucks.
3. Encourage public transport
A shift from private cars to buses and trains can quickly reduce oil demand.
4. Alternate private car access to roads in large cities on different days
Number-plate rotation schemes can reduce congestion and fuel-intensive driving.
5. Increase car sharing and adopt efficient driving practices
Higher car occupancy and eco-driving can lower fuel consumption quickly.
6. Efficient driving for road commercial vehicles and delivery of goods
Better driving practices, vehicle maintenance and load optimisation can cut diesel use.
7. Divert LPG use from transport
Shifting bi-fuel and converted vehicles from LPG to gasoline can preserve LPG for cooking and other essential needs.
8. Avoid air travel where alternative options exist
Reducing business flights can quickly ease pressure on jet fuel markets.
9. Where possible, switch to other modern cooking solutions
Encouraging electric cooking and other modern options can reduce reliance on LPG.
10. Leverage flexibility with petrochemical feedstocks and implement short-term efficiency and maintenance measures
Industry can help free up LPG for essential uses while reducing oil consumption through quick operational improvements.
Some governments, especially in hard-hit Asia, have already implemented emergency demand-side energy conservation measures in response to the Middle East conflict, such as introducing price caps, tax cuts, or subsidies on fossil fuels. Indonesia, Vietnam, and Thailand are among the countries encouraging or mandating remote working for civil servants, limiting travel by public officials, and encouraging limits on air conditioning temperatures. Many are also calling on the public to limit energy demand in homes and offices and take public transport.
“[T]oday’s report provides a menu of immediate and concrete measures that can be taken on the demand side by governments, businesses and households to shelter consumers from the impacts of this crisis,” said IEA Executive Director Fatih Birol, who warned that the impacts on energy markets and economies are set to become “more and more severe.”
“I believe it will be of use to governments around the world, in both advanced and developing economies, in these challenging times,” Birol added.
Featured image: Jeffry S.S. via Pexels.
More on the topic: Iran War: What the Gulf Conflict Tells Us About Energy Security
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