- The IEA said the Iran war has triggered the largest oil supply disruption on record and outlined additional steps for governments, businesses, and households to help limit the impact.
- The agency said that encouraging a shift from private cars to public transport, along with measures such as alternating access for private vehicles in major cities, can help reduce congestion and lower fuel consumption.
- Meanwhile, the Trump administration is considering plans to either take over or blockade Iran’s Kharg Island, according to a report by Axios.
The International Energy Agency (IEA) has issued a slew of recommendations to help people cope with rising crude oil prices as the war in Iran enters its 21st day.
The IEA said the Iran war has triggered the largest oil supply disruption in history, and while some steps have already been taken to ease demand pressures, it outlined additional actions for governments, businesses, and households to help mitigate the impact.
“In the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe,” said IEA Executive Director Fatih Birol.
WTI crude futures expiring in May have gained around 42% since the Iran war began in February, while Brent crude futures expiring in the same month have soared about 48%.
IEA’s Top Recommendations To Deal With Oil Price Shock
Some of the top recommendations outlined by the IEA include working from home to reduce commuting-related demand for petrol and diesel. The agency has also suggested that reducing speed by 10 kilometers per hour on the highway will cut fuel use across both passenger and freight segments.
It said that encouraging a shift from private cars to public transport, along with measures such as alternating access for private vehicles in major cities, can help reduce congestion and lower fuel consumption.
The IEA has also recommended reducing air travel, increasing carpooling, and shifting LPG use from transport to cooking as additional measures to ease demand for crude oil.
“While the demand-side measures highlighted in the report cannot match the scale of disrupted supply, they can play a meaningful role in lowering costs for consumers, reducing market strains and preserving fuels for essential uses until normal flows resume,” the agency said.
This comes amid a continued rise in crude oil prices. U.S. West Texas Intermediate (WTI) crude futures maturing in May rose nearly 1% to more than $96 a barrel. Brent crude futures expiring in May gained over 2% to hover around $111 a barrel.
The United States Oil Fund ETF (USO) was up nearly 1% at the time of writing, while the ProShares Ultra Bloomberg Crude Oil ETF (UCO) gained about 2%.
Trump Mulls Taking Over Or Blockading Iran’s Kharg Island
Meanwhile, the Trump administration is considering plans to either take over or blockade Iran’s Kharg Island, according to a report by Axios.
This is part of the Trump administration’s plans to pressure Iran to reopen the Strait of Hormuz, through which nearly a fifth of the world’s oil supply passes.
“We can knock out their oil in Kharg Island. The only thing we didn’t take down was the oil, because if we knock out, I call them the pipes, very complex, but if you do that, it will take them forever to rebuild,” President Donald Trump said on Tuesday, according to a report by Politico.
Meanwhile, U.S. equities declined in Friday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.35%; the Invesco QQQ Trust ETF (QQQ) fell 0.48%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.24%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘extremely bearish’ territory.
Also See: Novo Nordisk Receives FDA Approval For Higher Dose Of Its Weight-Loss Drug Wegovy
For updates and corrections, email newsroom[at]stocktwits[dot]com.