IEA Warns Global Energy Security at Risk if Oil Flow in Strait of Hormuz Not Restored

LNG carrier ships crossing the waters. Illustration photo: Pexels.

JAKARTA - Global energy security is at risk if oil flows through the Strait of Hormuz do not increase immediately in the next few weeks, said the Executive Director of the International Energy Agency (IEA), Fatih Birol.

Arab News, quoted on Friday, July 17, said the warning was delivered by Birol at a Council on Foreign Relations event on Thursday. He said the world needs to worry if the situation does not improve immediately.

"Oil security is still an important issue. We must be concerned, and I am concerned, if the situation does not improve in the next few weeks," said Birol.

The Strait of Hormuz is a narrow sea lane between Iran and Oman. Under normal conditions, about a fifth of the world's energy shipments pass through the route.

However, most traffic through the strait has been hampered since the conflict broke out on February 28, after the United States and Israel attacked Iran.

Energy prices have risen sharply. However, a number of factors are still holding back the increase from being higher.

China had reserves of more than 1 billion barrels of oil before the war. The use of electric vehicles and public transportation also helped the country reduce its oil needs.

Price pressure was also dampened by the release of oil reserves of up to 400 million barrels coordinated by the IEA.

However, Birol said the factors holding back the price increase could not last forever. He previously called the Iran war the worst energy disruption in history.

Increased production in the United States has also helped reduce supply pressures. The country is the world's largest oil and gas producer.

"The increase in US production is very good. The United States can increase production by 1 million or 2 million barrels per day, but it cannot add 10 million barrels per day," said Birol.

The oil and gas supply crisis has put pressure on the world economy. However, the impact is not even.

According to Birol, Asia is the most affected because the region obtains 80 to 90 percent of its energy supply through the Strait of Hormuz.

Japan and South Korea are also affected. However, developing countries such as Pakistan, Bangladesh, and India are facing the most severe pressure.

The high cost of petroleum products also poses a health risk. Some people in developing countries, especially women, switch to using wood and animal dung as cooking fuel because petroleum products are no longer affordable.

The fuel produces harmful emissions and increases health risks.

Oil prices had fallen by about $20 a barrel after the IEA coordinated the release of reserves in March. The move showed that the organization, which represents more than 30 countries, can still use reserves if the situation worsens.

"Although the number is very large, the release only covers 20 percent of the stock we have. As much as 80 percent is still available," said Birol.