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The International Energy Agency is calling for people to cut oil demand by working from home more, flying less and driving slower, as the Iran war rocks global energy markets.
The agency says those measures, alongside steps such as sharing cars and switching to electric cookers, are needed to help with the “largest supply disruption in the history of the oil market”, which has pushed the price of a barrel of oil above $100.
About 20 per cent of global oil supplies are typically shipped through the Strait of Hormuz, which Iran has in effect closed with strikes on oil tankers. The gas market went into a frenzy on Thursday after Iran hit the world’s largest liquefied natural gas facility in Qatar, following an Israeli strike on an Iranian gasfield.
The IEA’s members, which include the US, UK and Japan, have agreed to release a record 400mn barrels of oil into the market to try to ease the crisis, while the US has also lifted some sanctions on Russian oil.
But the IEA said “supply-side measures alone cannot fully offset the scale of the disruption”.
It added: “Addressing demand is a critical and immediate tool to reduce pressure on consumers by improving affordability and supporting energy security.”
While it is the IEA’s role to boost energy security, such recommendations are rare. During the energy crisis of 2021-23 when Russian supplies of gas to Europe were cut, it recommended people turn down their thermostats and buy heat pumps to replace gas-fired boilers — but the latest notice is wider ranging.
The call has echoes of the 1970s, when the US and UK lowered speed limits in response to the Arab oil embargo.
The IEA’s recommendations are not binding and it is up to individual governments to decide whether they want to impose restrictions or leave it up to individuals to decide.
Several governments have already taken steps. Pakistan and the Philippines have introduced a four-day working week for public officials, while Thailand and Vietnam are encouraging remote working.
But others are going in a different direction. Italy on Thursday temporarily cut fuel taxes by 20 per cent in a bid to cushion citizens from the shock of skyrocketing prices. The cut will initially be in force for 20 days, then reviewed. Energy economists have criticised the move, saying it will promote consumption rather than conservation.
The IEA said widespread adoption of its recommendations would “amplify their global impact and help cushion the shock”.
Additional reporting by Amy Kazmin in Rome
