IEA calls for driving restrictions and air travel curbs to reduce oil demand

The Worldwide Vitality Company has known as for member nations to undertake “emergency measures” to chop oil demand within the wake of Russia’s invasion of Ukraine, together with driving restrictions, decrease pace limits and curbs on air journey.

Fatih Birol, head of the vitality watchdog, on Friday warned that such steps is perhaps vital as a result of “oil markets are in an emergency state of affairs . . . and it might worsen”.

As a lot as 2.5mn barrels a day of Russian oil exports might stop from subsequent month as a result of influence of the conflict and client boycotts of Russian crude, he stated. Russia is among the world’s largest oil producers.

The IEA has proposed 10 measures to cut back oil demand by 2.7m b/d inside the subsequent 4 months, which it stated would assist steadiness potential loss from the Russian market.

“Because of Russia’s appalling aggression in opposition to Ukraine, the world might be going through its greatest oil provide shock in many years,” Birol stated.

He urged IEA member nations — which embody most of the world’s largest vitality shoppers such because the US, Japan and Germany — to chop demand now, “to keep away from the chance of a crippling oil crunch”.

The measures embody reducing pace limits on highways by 10kph, which might save 430,000 b/d, decreasing enterprise air journey and taking trains as a substitute of planes the place potential.

Working from dwelling three days per week would additionally assist reduce oil demand, together with making public transport cheaper and even free. Lots of the proposals would reduce down on driving, together with banning personal automobiles from cities on Sundays and limiting personal automotive entry to roads in massive cities.

The IEA was based within the Seventies to assist oil-consuming nations reply to the 1973 oil disaster and monitor international vitality markets. However hardly ever has the physique needed to resort to the dramatic demand-reduction steps that it outlined on Friday.

The value of Brent crude, the worldwide benchmark, soared to $139 a barrel after Russia’s invasion of Ukraine amid provide issues. On Friday it traded at $107 a barrel.

Barbara Pompili, France’s ecological transition minister, stated the IEA plan to chop consumption provided “attention-grabbing concepts” that could possibly be a highway map for nations to cut back their oil dependence.

“France and all European nations should get out of their dependence on fossil fuels as quickly as potential. It’s an absolute necessity for the local weather, and in addition for vitality sovereignty,” she stated.

The IEA will current the suggestions to vitality ministers subsequent week as a part of its response plan for the present vitality disaster.

Birol warned that the mix of lack of Russian exports, elevated demand throughout the summer time journey season and low storage ranges meant the oil market might get even tighter than it was now.

“The rationale we got here up with this report is that oil markets are in an emergency state of affairs, and never solely that, it might worsen,” he stated.