Fuel market outlook bleak even if Hormuz reopens — IEA
Photo: The energy crisis will drag on for years even if peace is restored (flickr.com)
If the Strait of Hormuz remains closed, energy prices worldwide will rise significantly, and a return to normal will not happen quickly, says Fatih Birol, Executive Director of the International Energy Agency (IEA).
What's happening with oil supplies
So far, a price spike has been avoided. Birol explains this simply: tankers that set sail before the conflict began have already delivered their cargo. These shipments have temporarily cushioned the blow.
But in March, not a single new tanker was loaded. This means that the safety cushion will soon run out.
'We should prepare for volatile markets'
"We should prepare for volatile markets for some time," Birol says.
The IEA chief adds that markets are currently underestimating the impact of the war. Even if the Strait reopens, prices will not drop immediately.
Separately, he warns of a jet fuel shortage in Europe. By his estimate, reserves are sufficient for about six weeks.
Birol calls this the biggest energy crisis we have ever faced.
How long will recovery take?
It will take years to fully restore production in the region.
"In Iraq, for example, it will take much longer than in Saudi Arabia. However, we estimate it will take approximately two years overall to reach pre-war levels again," he explains.
Warnings about dependence on Hormuz Strait have been issued for years
Birol recalls that he had long warned against excessive dependence on a single waterway.
According to him, the $110 trillion global economy could find itself "held hostage by a few hundred armed men".
"Now, we see how real that risk was," he says.
Iran began charging fees for ships passing through the Strait of Hormuz. This angered US President Donald Trump, who ordered the fees to be stopped.
Meanwhile, Russia, on the other hand, benefited from the blockade of the Strait of Hormuz. In just one month, it doubled its oil revenues.
