Governments must act swiftly to reduce oil demand, the International Energy Agency (IEA) warned, as the closure of the Strait of Hormuz triggers the most severe supply disruption in modern history.
Oil prices have surged past $100 a barrel following military strikes on Iran, with analysts forecasting potential spikes to $200. The strait carries 20% of global oil flows-around 15 million barrels of crude and 5 million barrels of products.
The IEA urges nations to implement measures including remote work, lower speed limits, car-sharing, and reduced air travel. Business flights could be cut by 40%, potentially reducing jet fuel demand by 7% to 15%.
Several countries, including the Philippines, Pakistan, and Sri Lanka, have adopted shorter workweeks, while Thailand, Vietnam, and Lao PDR are promoting remote work. Similar actions were taken in Europe during the 2022-23 energy crisis.
Emergency oil reserves totaling 400 million barrels have been released, but the IEA stresses that supply alone cannot stabilize markets. The agency cautions against relying solely on production increases, warning of prolonged strain on refiners and rising electricity costs.
Rising energy prices threaten the poorest households most, prompting calls for targeted financial aid across the European Union. EU leaders convened a summit to address electricity bill surges, with President Ursula von der Leyen acknowledging growing concerns over future supply risks.