Fatih Birol, the head of the International Energy Agency (IEA), anticipates that the repercussions of the conflict in the Middle East will be felt for a considerable time. While he praised the announcement of a two-week ceasefire in the region as “a very welcome piece of news” he stressed that the reopening of trade through the Strait of Hormuz is the most critical factor for easing pressure on energy supplies, prices, and the global economy.
However, Birol does not expect the energy policy consequences to resolve quickly. He noted that restarting shut-down facilities will require time, and tankers leaving the Gulf region need time to reach their destinations. While South Asia might see supplies within a few days, reaching farther markets in Asia and Europe could take several weeks. Should the Strait of Hormuz not reopen fully, Europe could manage without major problems in April, but the situation will become much tougher in the weeks that follow, particularly concerning diesel and kerosene supplies.
He predicts that if the passage remains restricted, there could be restrictions on air travel starting mid-May. To ensure a return to pre-war stability, he urged that the Strait of Hormuz reopen fully by the end of April. He emphasized that the longer it remains closed, the more difficult and painful the recovery will be. Birol pointed out that numerous energy infrastructures have been damaged, a repair process that will take time, stating that the energy supply ramifications could be felt for months, if not years.
Furthermore, Birol advised against capping gasoline prices. He argued that the best way to assist vulnerable populations financially is through targeted support rather than blanket price reductions. He explained that wealthy and poor individuals purchase the same gasoline and electricity regardless of price caps, whereas targeted aid focusing on lower incomes is more precise and should only be temporary.
Looking at longer-term impacts, Birol also forecasted potential speed limits on German autobahns if the energy crisis persists. While acknowledging the centrality of automobiles in Germany, he urged a realistic assessment of the situation, predicting that measures would become necessary if tensions remained high.
Separately, he criticized Germany’s decision to phase out nuclear power, labeling it a “historical mistake”. According to Birol, the decommissioning of nuclear plants was detrimental to the economy, the emission profile, and Germany’s sovereignty, suggesting that the country’s current vulnerability would be lessened had the government kept the nuclear facilities operational.