Work from home and slow down on the road: world’s energy watchdog advises emergency measures as oil prices rise | Oil
The world’s energy watchdog has advised governments to reduce highway speeds and encouraged workers to carpool or, ideally, work from home to combat rising oil prices and looming fuel shortages caused by conflict in the Middle East.
It also recommended that countries consider limiting vehicle access to designated areas in major cities by giving vehicles with odd-numbered license plates access to vehicles with even-numbered license plates on different weekdays.
The International Energy Agency (IEA) has advised member countries, including Australia, the UK and the USA, to take urgent measures to reduce oil demand, following the military attacks on Iran, which triggered the most significant supply disruptions in the history of the global oil market.
Concerns have emerged that Australia’s crude oil imports from major Asian suppliers are at risk as countries seek to increase their own reserves.
Last week the IEA ordered the largest release of state oil reserves in its history to help calm the shock to oil prices. It will also consider new evacuation orders after warning that it will take time for markets to recover from the ongoing crisis in the Strait of Hormuz.
Major disruption in oil trade triggered sharp increases in gasoline, diesel, jet fuel and LPG prices.
While the oil release increases available supply, the new recommendations are about reducing demand and helping households and businesses prepare for a prolonged disruption in energy markets.
The energy agency said: “Demand containment is one of the emergency response measures that all IEA member countries should have on hand as an emergency, and they can use it to contribute to the IEA’s collective action in the event of an emergency such as this current outage.”
Given the high consumption of cars and trucks, most of the 10 measures focus on road transport fuels, but air travel and even cooking methods are also addressed.
Recommended actions are:
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Work from home whenever possible to save gas.
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Reduce highway speed limits by at least 10 km/h to reduce fuel use.
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Promote public transportation to reduce oil demand.
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Limit vehicle access to roads in major cities with a license plate rotation scheme.
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Increase carpooling.
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Promote efficient driving for commercial vehicles through load optimization and vehicle maintenance.
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Move LPG away from transportation to save it for essential needs such as cooking.
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Avoid air travel whenever possible.
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Promote electric cooking and other options to reduce dependence on LPG.
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Help industrial plants switch between different petrochemical feedstocks to release LPG.
The measures come amid growing concerns that the United States does not have a clean exit strategy from the conflict that could guarantee the steady resumption of oil trade and other cargo transportation through the Strait of Hormuz, which is largely controlled by Iran.
Concerns have intensified after energy infrastructure was targeted this week, raising the risk of long-term disruptions to supply.
Australia’s initial response to the oil crisis focused on supply-side measures such as relaxing fuel standards and trying to ensure that the alleged anti-competitive behavior of major fuel retailers did not gain currency.
State governments have been reluctant to discuss contingency plans such as fuel rationing.
IEA Executive Director Fatih Birol said that if there is no quick solution to the Iran conflict, “the impacts on energy markets and economies will become increasingly severe.”
Birol said the proposed measures provide “a menu of immediate and concrete measures that can be taken on the demand side by governments, businesses and households to protect consumers from the effects of this crisis.”
Governments around the world are taking measures to reduce oil demand and support households, with Austria and Greece capping profit margins at fuel retailers, the energy agency said. Vulnerable households in the UK will be given help to pay for heating oil.
Many countries have restricted travel by public officials and launched campaigns to encourage people and businesses to reduce their energy consumption.
