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

“Oil security is still a critical issue,” Birol told a Council on Foreign Relations event. “We should be worried, and I ​am worried, if the situation does not improve in the next few weeks.”

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 mostly blocked since the conflict began on February 28 ​with U.S. and Israeli strikes on Iran.

Despite sharp energy price increases, Birol said several factors have moderated ​the rise.

These include China’s stockpile, which totaled more than 1 billion barrels of oil before the war, its oil conservation through increased use of electric vehicles and public transport and an IEA-coordinated release of up to 400 million barrels of ​oil.

But those fixes “can’t last forever,” said Birol, who has said the Iran war is the worst ​energy disruption in history.

Birol said a boost in production by the United States, the world’s top oil and gas ‌producer, ⁠has helped.

“The U.S. increase in production is very good. The U.S. increased 1 million, 2 million but it cannot increase 10 million,” barrels per day of crude oil output, he said.

The oil and gas supply crisis has hurt economies around the world, but in an asymmetric way, he said.

“It is mainly Asia, because ​Asia was getting 80 to ​90% of this energy ⁠from the Strait of Hormuz,” he said.

Japan and South Korea have suffered, but developing countries including Pakistan, Bangladesh and India have been hit hardest, he ​said.

Oil prices fell about $20 a barrel after the coordinated IEA release in March, and the action signaled to markets that the ⁠organization ​representing more than 30 countries could tap reserves again if ​things get worse.

“Even though it was huge,” Birol said of the up to 400-million-barrel release, “It was only 20% of the stocks we ​have, 80% is still in the pocket.”