IEA warns Europe has “six weeks” of jet fuel left amid energy crisis

The head of the International Energy Agency (IEA) has warned that Europe may have “maybe six weeks or so” of remaining jet fuel supplies, cautioning that flight cancellations could begin “soon” if oil flows remain disrupted by the war involving Iran.

IEA Executive Director Fatih Birol, speaking in a wide-ranging interview with Associated Press from his Paris office overlooking the Eiffel Tower, described the situation as “the largest energy crisis we have ever faced,” driven by disruptions to oil, gas and other critical supplies passing through the Strait of Hormuz.

“In the past there was a group called ‘Dire Straits.’ It’s a dire strait now, and it is going to have major implications for the global economy. And the longer it goes, the worse it will be for the economic growth and inflation around the world,” he said.

Birol warned that the consequences would include “higher petrol (gasoline) prices, higher gas prices, high electricity prices,” adding that the impact would be uneven across regions. “The countries who will suffer the most will not be those whose voice are heard a lot. It will be mainly the developing countries. Poorer countries in Asia, in Africa and in Latin America,” he said.

“Some countries may be richer than the others. Some countries may have more energy than the others, but no country, no country is immune to this crisis,” he added.

He stressed that without a resolution to the Iran conflict and the full reopening of the Strait of Hormuz, “Everybody is going to suffer.”

Nearly 20% of global oil trade passes through the strait in normal conditions. Birol warned that if the waterway is not reopened within weeks, the effects on global energy markets would intensify.

“In Europe, we have maybe six weeks or so (of) jet fuel left,” he said. “If we are not able to open the Strait of Hormuz ... I can tell you soon we will hear the news that some of the flights from city A to city B might be canceled as a result of lack of jet fuel.”

He added that if the situation persists until the end of May, “many countries — starting from the weaker economies — are going to face huge challenges,” potentially ranging from high inflation to “slow growth or even to recession in some cases.”

Birol also criticized the so-called “toll booth” system reportedly applied by Iran to vessels passing through the strait. He warned that normalizing such a system could set a precedent for other key maritime routes.

“If we change it once, it may be difficult to get it back,” he said. “It will be difficult to have a toll system here, applied here, but not there.”

“I would like to see that the oil flows unconditionally from the point A to point B,” he added.

Birol noted that more than 110 oil tankers and over 15 liquefied natural gas carriers are currently waiting in the Persian Gulf, which could help ease shortages if they are able to pass through the Strait of Hormuz, though he said: “But it is not enough.”

Even in the event of a peace deal, he warned that damage to energy infrastructure would delay recovery. “Over 80 key assets in the region have been damaged. And out of these 80, more than one third are severely or very severely damaged,” he said.

“It will be extremely optimistic to believe that it will very quick,” he added. “It will take gradually, gradually, up to two years to come back where we were before the war.”

Birol also questioned how “a couple of hundred men with guns” — apparently referring to Iranian forces — could disrupt the global economy, stressing the strategic importance of the Strait of Hormuz.

The crisis, he said, could accelerate global energy transitions and reshape the geopolitical landscape of energy.

“Energy and geopolitics have been always interwoven,” he said. “But I have never, ever seen ... such a dark and long shadow of geopolitics.”

“Unfortunately, energy is at the heart of many conflicts which, again, makes me, as an energy person, rather sad, to be honest,” he added.

By Vafa Guliyeva