Global energy security at risk if Strait of Hormuz does not open in weeks, IEA chief says

WASHINGTON — The world should be concerned about energy security if the United States and Iran do not restore oil flows through the Strait of Hormuz within the next few weeks, International Energy Agency Executive Director Fatih Birol said on Thursday.

Speaking at a Council on Foreign Relations event, Birol warned that oil security remains a critical global issue and said the prolonged disruption could have serious consequences for energy markets.

The Strait of Hormuz, a narrow waterway between Iran and Oman that normally carries about one-fifth of the world's energy shipments, has been largely blocked since the conflict began on Feb. 28 following U.S. and Israeli strikes on Iran.

Birol said several factors have helped limit the rise in energy prices despite the disruption. These include China's oil stockpile of more than 1 billion barrels before the conflict, lower fuel demand driven by the country's increased use of electric vehicles and public transportation, and the International Energy Agency's coordinated release of up to 400 million barrels of oil from emergency reserves.

However, he cautioned that those measures are only temporary.

Birol also said increased oil production in the United States, the world's largest producer of oil and natural gas, has helped ease supply pressures, but warned that production cannot rise indefinitely to offset the shortfall.

He said the supply crisis has affected economies around the world, with Asian countries bearing the greatest impact because the region relies heavily on energy shipments passing through the Strait of Hormuz.

According to Birol, Japan and South Korea have experienced disruptions, while developing countries such as Pakistan, Bangladesh and India have been hit even harder.

He also warned of potential health risks in developing nations, particularly for women, as many households have turned to alternative cooking fuels such as wood and animal dung after petroleum products became too expensive.

Birol noted that oil prices fell by about $20 per barrel after the International Energy Agency released emergency oil reserves in March. He added that the release represented only about 20% of the agency's available emergency stockpiles, leaving significant reserves available if market conditions worsen. -Reporting by Timothy Gardner; Editing by Chris Reese and Cynthia Osterman/Reuters