Work from home, avoid planes and cut speed limits to guard against oil shock
The world’s energy watchdog is urging Australians to work from home, drive at lower speeds and avoid air travel to offset the risk of a severe oil shortage if the Strait of Hormuz remains closed.
The International Energy Agency (IEA), a Paris-based agency set up to help prevent shocks after the 1973 oil crisis, issued a global warning on Friday, telling policymakers that a private release of 400 million barrels of oil 10 days earlier would not be enough to offset the potential impact of war.
Fatih Birol, general manager of the organization, which leads the global effort to pump reserve stocks into the market, said that “if a quick solution is not provided, the effects on energy markets and economies will become increasingly severe.”
“The war in the Middle East is creating a major energy crisis, including the largest supply disruption in the history of the global oil market,” he said.
Israeli Prime Minister Benjamin Netanyahu said he saw the war “going to end much quicker than people thought”, while Prime Minister Anthony Albanese sidestepped questions about Australia’s absence in a joint statement prepared by Western countries offering support for reopening the strait, which has been blockaded by Iran to drag US allies into recession.
Israel sparked an escalation in the conflict and rattled commodity markets when it struck a key gas field earlier this week, but oil prices fell after Netanyahu said Friday that Israeli strikes had destroyed Iran’s uranium enrichment and ballistic missile production.
Albania’s government announced on Friday the extension of state subsidies to Australia’s last two oil refineries to keep them alive for the next decade, at a time when concerns about self-sufficiency are growing.
As global LNG prices rose after Israel struck the South Pars gas facility in Iran, the world’s largest LNG facility, ministers also left the door open to an unexpected new tax on gas companies or to raise more revenue from the Oil Resource Lease Tax. The offers were: first reported by ABC.
Labor has tried to quell panic buying by repeatedly pointing out that fuel is still entering Australia. But the government has acknowledged that imports will not flow in normal volumes from mid-April, which could create uncertainty among households and business executives in a number of oil-dependent sectors.
Birol, who will speak at the National Press Club in Canberra on Monday at a time when the world’s attention is focused on the energy crisis, announced 10 policies that he said could help governments around the world reduce oil demand.
The IEA said asking workers to stay at home as much as possible could reduce oil consumption from cars by up to 6 percent. The institution said that reducing speed limits by 10 km/h would reduce gasoline use by 5-10 percent. Road transport accounts for approximately 45 percent of global fuel demand.
Other proposed measures include encouraging public transport, allowing odd-numbered license plates to use main roads one day and even-numbered license plates the next, carpooling, reducing air travel and using gas-free stoves.
The Albanian government does not talk publicly about its detailed modeling of actions it might take to save fuel if the war drags on for a long time. Sources who sat in on high-level briefings with ministers and were not authorized to speak publicly about them said the government knew tougher measures might be necessary.
“We’re not there yet and the situation is extremely uncertain, so it’s no use coming up with frightening scenarios,” said a senior government official who asked not to be named.
Developed countries have yet to cut travel, but many Asian countries and other less developed countries have done so, according to an IAE analysis of global policy responses. France, Japan, Korea, Croatia, Austria and other countries have moved to either limit fuel retailer margins or prices.
Energy and home affairs ministers in Australia have emergency powers to effectively nationalize elements of the economy and fuel supply, but Labor has no intention of using those powers as of this week. States also have extraordinary powers regarding fuel rationing.
Birol also suggests long-term measures such as purchasing more electric vehicles; Because Spain attributes low energy prices to its focus on renewable energy at a time when European countries are emptying out their climate action policies to balance the energy crisis.
Others, including Foreign Affairs Minister Penny Wong and Resources Minister Madeleine King, have been working on the phone with international counterparts to lock down oil supplies.
In a worrying development on Friday, China told fertilizer exporters to stop shipping some products overseas, raising fears for Australian farmers. Earlier this month, China asked major refiners to halt exports of jet fuel, from which Australia accounts for a third of its supply.
Wong had a phone call with US Secretary of State Marco Rubio on Friday morning; This was a day after Albanese called for an end to the war after the US and Israel weakened Iran’s military capabilities.
Wong said he and Rubio “agreed that the international community must continue to work together to ensure critical waterways are not held hostage.” Australia, Britain, France, Germany, Japan and others were not part of the joint statement saying they were “ready to contribute to appropriate efforts to ensure safe passage through the Bosphorus” [of Hormuz].”
Australia’s lack of involvement reflected the fact that the statement was hastily made at midnight local time, but also emphasized Australia’s decision not to send forces to guard the crossing.
Opposition defense spokesman James Paterson said: “The Albanian Labor Party government must urgently explain why we did not take part in the action. Were we not invited to take part? Did we refuse?”
Speaking in South Australia, Albanese said Australia was “not at all” incompatible with Western countries.
“We want to see the Strait of Hormuz opened. We are offering support and we have support on the ground in the region,” Albanese told reporters.
National leader Matt Canavan, an advocate of fossil fuels and critic of green energy, said Australia should start drilling for oil in the Great Australian Bight off its southern coastline.
Paul Sakkal is the chief political correspondent. It has previously covered Victorian politics and won the Walkley and Quill awards. Reach him securely on Signal @paulsakkal.14Connect with: X or email.
