Damage to Middle East Energy Assets Starting to Disrupt Global Supply
JAKARTA - More than 40 energy assets in nine countries in the Middle East have suffered "severe or very severe" damage amid the ongoing conflict.
The Executive Director of the International Energy Agency (IEA) Fatih Birol said the damage could extend disruptions to global supply chains even after the conflict ends.
"It will take time for oil fields, refineries, and pipelines to return to operation," he said, quoted by ANTARA, Monday, March 23.
Birol said the more than three-week-old war had disrupted the entire energy supply chain and almost stopped shipments through the Strait of Hormuz.
According to him, the impact of the disruption resembles "two major oil crises in the 1970s and the natural gas crisis around 2022 combined."
"Not only oil and gas, but several vital arteries of the global economy... their trade is all disrupted," he added.
Birol warned Asia is particularly vulnerable because of its dependence on regional energy supplies.
"Every country first considers its own domestic interests, but... serious export restrictions without clear reasons may not be something that gets a plus," he said.
The IEA plans to release 400 million barrels of oil from emergency reserves to reduce supply shocks, it said, adding that additional reserves could be released if disruptions continued.
However, Birol stressed that reopening the Strait of Hormuz remains important to restore global energy flows.
Shipping through the Strait of Hormuz has been disrupted since early March after the US and Israel carried out a joint attack on Iran. Around 20 million barrels of oil normally pass through it every day, and the disruption has increased shipping costs and pushed global oil prices to soar.
The US-Israeli attack on Iran, which began on February 28, reportedly killed at least 1,300 people, including then Supreme Leader Ali Khamenei.
Iran has retaliated with drone and missile attacks targeting Israel, Jordan, Iraq, and Gulf states hosting US military assets.