The current crisis is “two oil crises and a gas collapse in one,” said Birol in Sydney, referring to the oil crises of the 1970s and the effects of the Russian invasion of Ukraine in 2022. During the two oil crises in the 1970s, the world “each lost about five million barrels of oil per day,” said Birol. “To date we have lost 11 million barrels per day, more than two major oil shocks combined.” Over the course of the war, at least 40 energy systems in the region have been “severely or very seriously damaged.”
In view of the blockage of the Strait of Hormuz, which is important for global maritime trade, the IEA chief also spoke of a “major threat” to the global economy. “No country will be spared from the impact of this crisis if it continues to develop in this direction,” he said. Global efforts are therefore required. “I really hope that this issue will be resolved as soon as possible.”
Since the start of the Iran war on February 28, the Strait of Hormuz, controlled by the Iranian Revolutionary Guards and through which around a fifth of the world’s oil and liquid gas transport passes, has been effectively closed. The blockade and Iranian attacks on oil and gas facilities in the Gulf region caused oil and gas prices to skyrocket.
Trump gave Iran an ultimatum on Saturday and threatened the country with attacks on power plants if it did not reopen the Strait of Hormuz to shipping traffic within 48 hours. The Iranian military then threatened a long-term blockade of the Strait of Hormuz. The price of oil continued to skyrocket and stock market prices collapsed when trading began on Monday morning. A few hours before the ultimatum expired, Trump made a U-turn and postponed the attack plans.
After Trump’s comments, the price of oil initially fell dramatically by more than 14 percent before increasing slightly again. At around 1:30 p.m. it was around eight percent in the red; a barrel of North Sea Brent cost 102.42 euros. The European stock exchanges reacted with massive price gains, the German stock index (Dax) made up for its losses since the start of trading and was up more than two percent. The important indices on New York’s Wall Street also rose at the start of trading.
The bottom line, however, remains that the European stock markets are “significantly down compared to the level before the outbreak of military escalation,” explained analyst Sören Hettler from DZ Bank. Market participants continued to behave cautiously as a sustainable solution to the conflict was not certain. “In addition, the long-term effects of the damage caused to energy production and infrastructure are difficult to assess,” Hettler continued.
Meanwhile, countries around the world continued to try to provide relief for households and companies in view of the massive increase in energy prices. Greece announced a subsidy package totaling €300 million for fuel and fertilizers, while the Swedish government proposed a fuel tax cut.
In China, the government limited the set cap on fuel prices. The NDRC economic planning commission said it would take “temporary regulatory measures”: It increased the maximum price for gasoline and diesel by 1,160 yuan (146 euros) and 1,115 yuan (140 euros) per ton, respectively. According to the Commission, this is about half the price increase that the government’s usual price mechanism would have resulted in.
