International Energy Agency: The War Costs the World 11 Million Barrels of Oil Per Day

SadaNews Economy - The Executive Director of the International Energy Agency, Fatih Birol, stated today, Monday, that the agency is conducting intensive consultations with governments in Asia and Europe to discuss the possibility of drawing additional amounts from strategic oil reserves, in order to address the economic repercussions resulting from the ongoing war.

In a speech delivered to the "National Press Club" in the Australian capital Canberra, Birol confirmed that the agency would not hesitate to take proactive steps, saying: "If necessary, we will of course do so. We will analyze and assess the markets carefully and discuss the matter with member countries in order to make the appropriate decision based on the circumstances."

Birol explained that there is no specific price level for crude oil that represents a "red line" for releasing new quantities, noting that the goal of this step is to "mitigate the pain experienced by the global economy" and to calm the markets, even though it does not represent a radical solution to the crisis.

Numbers and Facts about the Current Crisis

These statements come amid a complex situation in global energy markets, as the agency recorded the following data:

-Supply losses: The war has resulted in a loss of about 11 million barrels per day from global supplies.

-Historical comparison: Birol described the current crisis as "worse than the oil shocks of the 1970s," especially with the combined effects of the Russian-Ukrainian war on the gas sector.

-Previous action: Member countries had agreed on March 11 to a record withdrawal of 400 million barrels (equivalent to 20 percent of total stocks).

Birol started his global tour from Australia, pointing out that the Asia-Pacific region is the most at risk, given its heavy reliance on oil and vital products (such as fertilizers and helium) that pass through the Strait of Hormuz. He clearly emphasized that: "The most important and only solution to this problem is to open the Strait of Hormuz to ensure the flow of supplies."

In addition to drawing from reserves, the Director of the International Energy Agency reviewed a range of solutions that countries can adopt to reduce demand, including:

-Reducing speed limits for vehicles.

-Activating work-from-home policies (as happened in Europe in 2022).

-Improving liquid fuel stock levels (commending Australia for increasing its diesel stock).

Fatih Birol is set to head to Japan later this week for further talks ahead of the G7 meeting.