The head of the International Energy Agency stated on Monday that the war in Iran poses a “major, major threat” to the world economy.
Fatih Birol stated on Monday at Australia’s National Press Club in Canberra that “no country will be immune to the effects of this crisis if it continues to go in this direction.”
He claimed that the Middle East crisis had a worse effect on gas than the conflict between Russia and Ukraine and a worse impact on oil than the two oil shocks of the 1970s combined.
Early on Monday, Israel launched a fresh round of attacks against Tehran.
Additionally, if Tehran doesn’t completely open the Strait of Hormuz within 48 hours, U.S. President Donald Trump threatened to “obliterate” Iran’s power plants.
Iran then declared that it would attack Israeli and American energy and infrastructure assets in retaliation for any such strike.
As oil prices rise, Trump is under more domestic pressure to secure the strait.
One of the main concerns is that the war would permanently halt the Middle East’s production of gas and oil, which would result in high prices for some time and global inflation.
As long as oil prices don’t remain excessively high for an extended period of time, the U.S. stock market has a history of recovering somewhat swiftly from previous crises in the Middle East and elsewhere.
Iran threatened to begin attacking its Gulf neighbors’ power plants on Monday.
In Australia, Birol declared, “The situation is very severe.”
He said that the combined loss of 10 million barrels per day during the oil crises of 1973 and 1979 resulted in “major economic problems around the world, the recessions.”
And as of right now, we are losing 11 million barrels every day, which is more than two significant oil shocks combined.
He claimed that the gas markets, particularly in Europe, “lost about 75 billion cubic meters, 75 BCM,” following Russia’s invasion of Ukraine.
Thus far, this crisis has caused us to lose almost 140BCM, or nearly twice as much.
According to Birol, 40 energy assets were “severely or very severely damaged” across nine nations in the region.
“Some of the vital arteries of the global economy, such as petrochemicals, fertilizers, sulfur, and helium, are all interrupted, which would have serious consequences for the global economy,” he stated.
He stated that the International Energy Agency has previously released 400 million barrels of oil, “which is historic,” to comfort the markets.
Never before have we unleashed so much oil into the market. Opening the Hormuz Strait is now the most significant way to address this issue.
The official also stated that he was discussing the possibility of releasing more oil reserves with governments in North America, Europe, Asia, and the Middle East.
He declared, “We will see, we will look at the markets.” “Of course, we will do it if it is necessary, but we will examine the circumstances, analyze, evaluate the market, and consult with our member nations.”
