IEA chief warns of tougher month for energy markets due to Iran war

 While March saw the delivery of cargo from the region shipped well before the crisis started, nothing has been loaded in April.

IEA executive director Fatih Birol said over 80 energy facilities in the Middle East were impacted, with more than a third severely damaged. (Reuters pic)

WASHINGTON:

 April could shape up to be a tougher month than March for energy markets and the economy due to the Middle East war, the head of the International Energy Agency said Monday.

While the month of March saw the delivery of cargo from the region “loaded well before the crisis started,” IEA executive director Fatih Birol said, “during the month of April, nothing has been loaded.”

“The longer the disruption is, the more severe the problem becomes,” he told reporters after a meeting at the International Monetary Fund.

His comments came as he met leaders of the IMF and World Bank on Monday as part of a group recently established to coordinate responses on the economic fallout from the war.

Birol said the agency was monitoring energy facilities in the region, noting that among over 80 impacted facilities, more than a third have been severely damaged.

He reiterated that the world is facing a major energy security challenge, adding that “no country is immune to this problem.”

IMF chief Kristalina Georgieva added Monday that there is a need to understand the scope of impact from infrastructure damage in the war.

World Bank President Ajay Banga said the institutions are making preparations for different scenarios involving the war, depending on how long and severe the conflict is.

The IMF is making up to US$50 billion in financing available, while the World Bank is ready to put forward up to US$25 billion, both institutions previously said.

Banga added Monday that if hostilities linger, the bank could make available as much as US$60 billion in total in the coming six months.

US-Israeli strikes targeting Iran beginning on Feb 28 triggered Tehran to retaliate by virtually blocking the Strait of Hormuz, a key waterway for energy and other shipments.

Last Wednesday, the United States and Iran agreed a two-week truce to allow negotiations to go ahead, but weekend talks in Islamabad failed, leading Trump to impose a US naval blockade of the Strait.

Mediator Pakistan and Gulf state Qatar on Monday called for the ceasefire to be respected as UN chief Antonio Guterres urged freedom of navigation to be restored in the region. - FMT