Australians Need Greater Awareness of Fuel Crisis, Warns International Energy Agency Chief
Australia’s households are not sufficiently informed about the sheer scale of the current global fuel crisis, according to the head of the International Energy Agency (IEA). Fatih Birol, Executive Director of the IEA, stressed the need for Australians to be better prepared for potential disruptions, especially if the conflict involving the US, Israel, and Iran escalates.
Speaking at the National Press Club in Canberra, Dr. Birol outlined the severity of the situation, which he described as a “major challenge” for the global economy. He had previously met with Australia’s Energy Minister, Chris Bowen, and was scheduled to meet with Prime Minister Anthony Albanese.
The crisis, ignited by recent strikes between the US, Israel, and Iran, has already had a significant impact on global oil supply. Dr. Birol stated that approximately 11 million barrels of oil per day have been lost in the three weeks since the conflict began. This figure dwarfs the losses experienced during the oil crises of the 1970s, where each crisis saw a loss of around five million barrels per day.
“Many of us remember the two consecutive oil crises of the 1970s… at that time, in each crisis, the world lost about five million barrels per day,” Dr. Birol explained. “And, after that we know that there was major economic problems. As of today, we lost 11 million barrels per day, so more than two major oil shocks put together.”
He further contextualised the crisis by comparing it to the impact of Russia’s invasion of Ukraine. “Plus, after the Russia’s invasion of Ukraine, the gas markets, especially Europe, we lost about 75 billion cubic meters (bcm). As of now, as a result of this crisis, we have lost about 140bcm. In that context, this crisis is at an extent now of two oil crisis and one gas crisis put all together.”
Potential Measures and Government Responsibility
When questioned about the preparedness of Australian households for potential fuel reduction measures, similar to those implemented during the COVID-19 pandemic, Dr. Birol expressed his reservations. “I definitely wouldn’t say yes,” he stated. “But, the households need to be better informed about the magnitude of the challenge we are facing.”
He emphasised that increased understanding of the problem could lead to better preparation, though he expressed hope for a peaceful resolution. “I think they’d be better prepared if they understood what kind of challenge we are facing today, but hopefully before they understand what the problem is, the problem may be hopefully solved in a peaceful manner. But, as I said, even the peace is made immediately, it will take some time to come back to the normal days we had before the war is started.”
The Australian government has been under pressure regarding its management of the unfolding situation. Energy Minister Chris Bowen recently acknowledged that six out of 81 fuel ships scheduled to arrive in Australia had been cancelled. However, he dismissed suggestions that emergency powers should be invoked.
Dr. Birol clarified that the decision to implement mandatory fuel reduction measures or rationing would rest with individual governments, including Australia’s. “Governments need to expect to take the measures in order to protect their economies, their citizens, their businesses,” he said. “The primary responsibility lies with the governments, with the help of industry, of course, with help of citizens.”
He drew a parallel to the collective action seen during the COVID-19 pandemic, suggesting that a similar united approach could help address the current crisis. “If we can all move together like, as you mentioned, during the time of Covid, we can address this issue, but the primary responsibility is the governance being to mobilise all of us together.”
IEA’s Actions and Future Outlook
The IEA has already taken significant steps to mitigate the crisis. Earlier this month, the agency mandated the release of 400 million barrels of oil from its member nations, including Australia, the UK, and the United States. This was the largest such release in the IEA’s history.
“We have never released so much oil to the markets, and it was not the easiest thing for all our member countries,” Dr. Birol remarked. While this measure provided a temporary reduction in fuel prices, its long-term impact is yet to be seen.
Following this release, the IEA has urged member countries to encourage their citizens to voluntarily reduce fuel consumption. Recommendations include carpooling, working from home, and limiting non-essential air travel. “We are doing this, to be very frank, to reduce the pain on the economy,” Dr. Birol stated.
A critical factor in resolving the crisis, according to Dr. Birol, is the reopening of the Strait of Hormuz, a vital chokepoint through which approximately one-fifth of the world’s oil transits. “The single most important solution to this problem is opening up the Strait of Hormuz.”
Looking ahead, Dr. Birol did not rule out further strategic oil releases. He confirmed ongoing consultations with governments across Asia and regular contact with colleagues in North America, the Middle East, and major consumer nations like China. “We will see. We will look at the markets. If it is necessary, of course, we will do it,” he said. “But, we will look at the conditions, we will analyse and assess the markets, and discuss with our member countries.”
The current situation also raises concerns about the supply of other essential commodities, such as fertilisers, sulphur, and helium.
