Fuel crisis triggered by Iran war is worse than all shocks of past 50 years combined, says global energy chief
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The Iran war has triggered a fuel crisis in Southeast Asia, with the region facing a severe energy shock that could lead to inflation, fiscal, and social stability crises. The International Energy Agency's chief, Fatih Birol, describes the current shock as worse than the two oil crises of the 1970s and the gas turmoil that followed Russia's invasion of Ukraine combined.
Southeast Asia is facing a severe fuel crisis due to the Iran war. The Strait of Hormuz, which carries one-fifth of the world's oil and LNG, is largely closed. The region's economies are highly exposed to imported hydrocarbons and maritime chokepoints. The International Energy Agency reports that the world has lost around 11 million barrels per day of oil supply. Brent has risen roughly 55 percent to around $100 a barrel. Southeast Asian governments are responding to the crisis with subsidies, budget cuts, and fuel-switching. The effects of the disruption are not limited to tanker routes or benchmark prices, but also impact petrol stations, electricity bills, freight costs, fisheries, fertilizer, and food.
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