Amid the biggest oil supply shock in history, the International Energy Agency (IEA) on Friday called on governments and consumers to consider immediate measures to reduce oil demand, including working from home and avoiding air travel where possible.
The IEA, which last week launched the biggest coordinated emergency stocks release, of 400 million barrels, since it was created in the 1970s, also recommended reducing speed on highways, more people car pooling, and using public transport, where possible and available.
The agency calls on consumers to avoid air travel where alternative options exist, as “reducing business flights can quickly ease pressure on jet fuel markets.”
The jet fuel and diesel markets have seen the biggest supply squeezes and price hikes amid soaring fuel price premiums over crude as the de facto closure of the Strait of Hormuz forced refiners in Asia to consider slashing processing rates and limiting exports. The product markets have come under more severe stress than the crude market as the Middle East war dislocated oil and fuel supplies and sent jet and diesel premiums over Brent to astronomical highs.
“The war in the Middle East is creating a major energy crisis, including the largest supply disruption in the history of the global oil market,” IEA Executive Director Fatih Birol said on Friday.
“In the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe.”
With limited capacity available to bypass the crucial waterway and storage filling up, Gulf countries have slashed their combined oil production by at least 10 million barrels per day (bpd), the IEA said in its monthly Oil Market Report last week.
“Today’s report provides a menu of immediate and concrete measures that can be taken on the demand side by governments, businesses, and households to shelter consumers from the impacts of this crisis,” Birol said on Friday.
By Tsvetana Paraskova for Oilprice.com
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