The Executive Director of the International Energy Agency (IEA), Fatih Birol, has issued a stark warning to dzwatch about the devastating consequences of a prolonged closure of the Strait of Hormuz, cautioning that oil and gas prices could skyrocket and that Europe could run out of jet fuel within just six weeks.
Birol described the closure as the most severe energy crisis the world has ever witnessed, warning that developing nations across Latin America, Africa, and Asia would bear the heaviest burden. He cautioned that many countries could slide from high inflation directly into recession if the strait remains sealed beyond the end of May.
He noted that allowing over 110 oil tankers and 15 liquefied natural gas carriers through the strait is insufficient to resolve the crisis, as more than 80 key regional assets have been damaged — over a third severely — potentially requiring two years to restore pre-war operational levels.
Birol concluded that the longer the closure persists, the worse the impact on global economic growth and inflation worldwide. Iran has closed the strait twice since the conflict began, and it remains unclear whether the recent ceasefire agreement will affect its status.
