Energy market under pressure amid Iran conflict
The head of the International Energy Agency (IEA), Fatih Birol, has warned that the current month is expected to be “even worse than March” for global energy markets, even if the war in Iran ends soon.
Speaking after meetings with the International Monetary Fund (IMF) and the World Bank, Birol highlighted severe disruptions in oil and gas supply chains linked to the ongoing conflict in the Middle East.
Global energy crisis driven by supply disruption
According to Birol, oil tankers were able to deliver stored cargoes in March because shipments had been loaded before the escalation of the crisis. However, he noted that “nothing has been loaded” onto oil tankers this month due to continued instability.
He described the situation as one of the most significant disruptions to global energy systems, affecting not only oil and gas but also fertilisers, petrochemicals and helium.
IMF and World Bank coordinate response
IMF Managing Director Kristalina Georgieva said the three institutions are coordinating their response to assess both the evolving crisis and how individual countries are being affected.
World Bank President Ajay Banga stated that both institutions could mobilise at least $20 billion each to support countries most affected by the global energy crisis.
He added that, if the situation continues, funding could be expanded to between $50 and $60 billion within six months through the reallocation of existing programmes.
Concerns over long-term supply damage
Georgieva also warned that the impact of the crisis could continue even after the conflict ends, due to damage sustained by oil and gas infrastructure in Gulf states.
Reports cited by the IEA suggest that more than one-third of energy infrastructure in Gulf countries has been severely affected since the escalation of the conflict.
Call for global cooperation
Despite the challenges, Birol pointed to the fact that more than 80% of global strategic reserves remain available.
He urged countries not to impose export restrictions and to act as “responsible members of the international community” in order to stabilise markets.
Also read: Strait of Hormuz reopening eases tension but economic risks linger
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