The IEA director today warned that the world faces the greatest energy threat in history due to the war in Iran, cautioning that it could take six months to restore oil and gas flows from the Persian Gulf.
In an interview with the Financial Times published today, International Energy Agency director Fatih Birol said politicians and markets are underestimating the magnitude of the disruption to energy flows, with approximately one fifth of global reserves stalled in the region.
“Some facilities will take six months to be operational, others much longer,” he added. “People understand this represents a major challenge, but I am not sure the magnitude and consequences of the situation are well understood,” Birol said, noting that the crisis has also affected global supplies of fertilisers for crops, petrochemicals for plastics, clothing and manufacturing. “These are vital raw materials for the global economy,” he said.
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Birol’s remarks come as Brent crude surpassed $110 per barrel following this week’s missile attacks on vital energy centres, including Iran’s South Pars gas field and Qatar’s Ras Laffan complex. Last week, the IEA announced the release of 400 million barrels of oil and refined products from global reserves to ease shortages — representing, according to Birol, just 20% of total reserves. “The most important measure is the resumption of transit through the Strait of Hormuz,” he said.
Birol also warned that the energy crisis could trigger political changes in governments worldwide, comparing the situation to the oil crises of 1973 and 1979.
