IEA: Oil supply disruptions will affect Europe starting in April

The head of the International Energy Agency, Fatih Birol, stated on Wednesday that the closure of the Strait of Hormuz severely restricts supply, and disruptions in Middle Eastern oil supplies will intensify in April and begin to impact the European economy.

He added that since the U.S.-Israel conflict with Iran began, more than 12 million barrels of oil have been lost due to attacks on Tehran’s energy assets in the region and restrictions on shipping through the strait.

Birol said in a podcast interview with Norwegian Sovereign Wealth Fund head Nikolai Tangen, “Oil losses in April will be twice those of March, and there will also be losses of liquefied natural gas… this will be reflected in inflation and will reduce economic growth in many countries.”

He further added that the losses in April are expected to expand because a batch of oil and liquefied natural gas cargoes arriving in March were contracted before the war and are still en route to their destinations.

Birol stated that the biggest issue is the shortage of jet fuel and diesel, which has already affected Asian countries but will also impact Europe.

He said, “We have already seen this in Asia, but I think soon, in April or May, it will affect Europe.”

Birol reiterated that after its member countries agreed to a record release of 400 million barrels of oil reserves, the IEA is considering further strategic reserve releases.

Birol said that the current disruptions in oil and liquefied natural gas supplies are more severe than the two oil crises of 1973 and 1979, as well as the disruption of Russian natural gas supplies caused by Moscow’s invasion of Ukraine in 2022—combining all these events.

He added that since the war began, about 40 critical energy assets in the Middle East have been damaged and will take time to recover.

Birol said, “We are facing a major, so far the largest supply disruption in history.”