Over 40 energy assets hit in West Asia as IEA warns of global supply crisis

Over 40 energy assets in nine West Asian countries have been severely damaged due to the Iran war, disrupting oil and gas supplies. The IEA has warned of serious global economic consequences, with supply losses already exceeding previous major energy crises

New Delhi: Over 40 energy assets across nine countries in West Asia have been “severely or very severely” damaged due to the Iran war and no country would be immune to the fallout of the disruption in oil and gas supplies, International Energy Agency (IEA) Executive Director Fatih Birol said in Canberra on Monday.

“The effect of the current disruptions in West Asia is equivalent to the two major oil crises in the 1970s and the 2022 natural gas crisis after Russia invaded Ukraine all put together,” Birol remarked.

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Addressing journalists at the Australia’s National Press Club, he said that while the oil crises of the 1970s led to a combined loss of around 10 million barrels per day, the present situation has already resulted in a loss of approximately 11 million barrels per day.

“Not only oil and gas, but some of the vital arteries of the global economy — such as petrochemicals, fertilisers, sulphur and helium — their trade is all interrupted, which will have serious consequences for the global economy,” Birol explained.

The IEA announced in early March that it would release a record 400 million barrels from its emergency oil reserves of its member countries to help ease supply shocks and bring down soaring prices in the aftermath of the war in West Asia.

“The IEA is currently in discussions with governments across Asia and Europe regarding the possible release of additional oil if necessary,” media reports cited Birol as saying.

However, with shipping across the Strait of Hormuz close to a complete standstill due to the war, the only true solution to fuel supply disruptions is the reopening of the major trade route, he pointed out.

He further warned that the global economy faces a ’major threat’ if the crisis continues to escalate.