IEA Advocates Work From Home, Reduced Air Travel To Tackle Oil Shock

New Delhi: Middle East war: IEA suggests carpooling, less air travel, speed curbs to ease oil shock

New Delhi, Mar 20 (PTI) Reducing highway speed limits by at least 10 km/h, switching to electric cooking, avoiding air travel where alternatives are possible and increasing car sharing — these are among the recommendations made in a new report by the International Energy Agency (IEA) to ease the economic impacts on consumers from oil market disruptions stemming from the Middle East war.

The conflict has triggered the largest supply disruption in the history of the global oil market, with shipping through the Strait of Hormuz, which normally carries around 20 per cent of global oil consumption, reduced to a trickle.

Around 20 million barrels per day of crude oil and oil products typically transit the Strait. The loss of these flows has tightened markets significantly, pushing crude oil prices above USD 100 per barrel and driving even sharper increases in refined products such as diesel, jet fuel and liquefied petroleum gas (LPG).

According to the report, restoring transit through the Strait remains essential to stabilise global energy markets. In the meantime, countries are acting on both supply and demand.

On March 11, IEA member countries agreed to release 400 million barrels of oil from emergency reserves — the largest stock draw in the agency’s history.

"As the global energy authority, the IEA is doing everything we can to support the stability of energy markets. We have recently launched the largest ever release of IEA emergency oil stocks – and I am in close contact with key governments around the world, including major energy producers and consumers, as part of our international energy diplomacy," said IEA executive director Fatih Birol.

However, supply-side measures alone cannot fully offset the scale of the disruption. Addressing demand is a critical and immediate tool to reduce pressure on consumers by improving affordability and supporting energy security.

The IEA report identifies 10 measures that can be implemented quickly by governments, businesses and households.

"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. In the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe," said Birol.

The report has recommended implementing work from home where possible.

"Working from home displaces oil use from commuting, particularly where jobs are suitable for remote work. Highway speed limits should be reduced by at least 10 km/h as lowering speed reduces fuel use for passenger cars, vans and trucks. A shift from private cars to buses and trains can quickly reduce oil demand," it said.

The report noted that number-plate rotation schemes can reduce congestion and fuel-intensive driving.

"Increase car sharing and adopt efficient driving practices, as higher car occupancy and eco-driving can lower fuel consumption quickly. Efficient driving for road commercial vehicles and delivery of goods…better driving practices, vehicle maintenance and load optimisation can cut diesel use.

"Divert LPG use from transport..shifting bi-fuel and converted vehicles from LPG to gasoline can preserve LPG for cooking and other essential needs. Avoid air travel where alternative options exist, as reducing business flights can quickly ease pressure on jet fuel markets," it said.

The International Energy Agency (IEA) has advocated a set of immediate demand-side measures, including work-from-home, lower speed limits, and reduced air travel to cushion the impact of a historic global oil supply shock triggered by disruptions in the Middle East.

Oil prices spiked to over USD 100 per barrel after the US and Israel attacked Iran and Tehran's sweeping retaliatory actions. For India, which imports about 88 per cent of its crude oil needs, the surge in global prices poses a significant macroeconomic risk -- widening the current account deficit, pressuring the rupee, and increasing fuel costs for households and businesses.

While petrol and diesel prices have so far not been increased, cooking gas LPG rates have been hiked by Rs 60 per cylinder.

"The conflict in the Middle East has created the largest supply disruption in the history of the global oil market, due to the near halt in shipping traffic through the Strait of Hormuz," IEA said in a new report.

Some 15 million barrels of crude oil and 5 million barrels of oil products typically traversed the Strait each day, equivalent to about 20 per cent of global oil consumption. Half of India's crude oil imports, 40 per cent of its gas imports and 85-90 per cent of its LPG shipments came through the strait.

"These flows have slowed to a trickle," IEA said. "The loss of supply is having significant impacts in global markets, pushing up prices for crude oil above USD 100 per cent barrel, and leading to much higher prices for some refined products -- notably diesel, jet fuel and liquefied petroleum gas (LPG)."

Stating that concerns are growing about the impacts of higher prices on households, businesses and the broader economy, IEA outlined 10 actions for governments, businesses and households to reduce fuel consumption and ease price pressures.

Key steps include promoting remote work to cut commuting fuel use, reducing highway speeds by at least 10 km per hour, encouraging public transport and carpooling, and limiting private vehicle access in major cities. Additional measures include improving driving efficiency, curbing business air travel, shifting away from LPG for non-essential uses, and enhancing industrial fuel efficiency.

IEA said, "At the national level, three additional remote workdays, for those whose jobs allow for it, could cut oil consumption from cars by 2-6 per cent, with average potential reductions of around 20 per cent for individual drivers."

Lowering the speed limit on highways by 10 km per hour can reduce an individual driver's oil consumption by 5-10 per cent and overall oil use of private cars by 1-6 per cent. Heavy freight trucks can save around 5 per cent due to their already lower speeds.

"Shifting travel away from private cars to public transport, such as buses and trains, can reduce national oil use for cars by 1 per cent to 3 per cent," IEA said, adding that a reduction of around 40 per cent of flights taken for business purposes is feasible in the short-term and, with very high participation in work-related flight reduction campaigns, could reduce jet kerosene demand by 7-15 per cent.

The IEA said restoring transit through the Strait remains critical to stabilising markets. Meanwhile, member countries have released 400 million barrels from emergency reserves -- the largest coordinated stock release in the agency's history.

The agency emphasised that while governments may step in to shield vulnerable consumers, limited fiscal space means relief measures must be targeted, with demand reduction playing a central role in managing the crisis.

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