Global Economy Faces Major Threat from Middle East Energy Crisis, Warns IEA

The IEA chief said the current situation in West Asia poses serious risks to economies worldwide.

The global economy is facing a major, major threat today, and I very much hope that this issue will be resolved as soon as possible, Birol said while speaking at a media event in Australia.

The fallout would not be limited to a few economies and "no country will be immune to the effects of this crisis," he noted.

The conflict has triggered the largest supply disruption in the history of the global oil market, with shipping through the Strait of Hormuz, which normally carries around 20 per cent of global oil consumption, reduced to a trickle.

Around 20 million barrels per day of crude oil and oil products typically transit the Strait.

Meanwhile, Iran's Foreign Ministry said the Strait of Hormuz is not blocked and navigation continues in the waterway, with necessary measures being taken due to wartime conditions.

The ministry said that Iran has always respected the freedom of navigation and maritime security and safety, adding that it has worked to uphold those principles over the years.

Last week, the IEA set out a range of demand-side actions - including work from home and avoiding air travel - for governments, businesses and households to alleviate the economic impacts on consumers.

Among the immediate actions to reduce demand is work from home where possible - displacing oil use from commuting, particularly where jobs are suitable for remote work. Where possible, switch to other modern cooking solutions. Encouraging electric cooking and other modern options can reduce reliance on LPG, said the report.

"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. In the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe," said Birol.

- IANS