Paris, Apr 21 (EFE).- The executive director of the International Energy Agency (IEA), Fatih Birol, warned on Tuesday that even if the Strait of Hormuz were to reopen immediately, it would take a long time to return to a normal situation, with the risk, therefore, being a surge in inflation and a slowdown in economic activity.
When the Strait of Hormuz reopens, it will take «two years» for energy prices to «return to normal in the Persian Gulf,» Birol said in an interview with France Inter radio.
The head of the IEA – an organization created in 1974 in response to the first oil crisis that brings together most OECD countries – described the current situation as «the biggest crisis in history.»
«If you combine this oil crisis with the gas crisis involving Russia, it’s already a huge crisis, but it’s not just oil and gas; it’s also fertilizers, petrochemicals, sulfur—all these products that will be in short supply, pushing inflation worldwide, particularly in emerging and developing countries, and this will slow growth,» he added.
The IEA official also warned that emerging countries like Bangladesh and Pakistan will face real difficulties.
According to him, «it will start with a slowdown in economic growth in these countries, job losses, and widespread unemployment,» before turning into a «debt spiral.»
In its monthly report on the oil market published on Apr. 14, the IEA reported that world oil production suffered a collapse of 10.1 million barrels per day (mb/d) in March due to the war in the Middle East, marking the largest drop in history.
And the blockade of the Strait of Hormuz led to losses in oil exports from the Persian Gulf of 13 mb/d, which must be partially offset by drawing upon declining reserves.
This situation has led the agency to significantly revise downward its forecasts for oil demand.
Birol confirmed that Russia was faring well for now in this crisis because its oil revenues doubled in March, mainly due to the surge in oil prices and, to a lesser extent, the increase in its exports.
However, he added that in the long term the consequences of this crisis will lead to a redrawing of the global energy map, as happened with the 1973 oil crisis, when, for example, many countries chose to build nuclear power plants to replace hydrocarbons in electricity production.
He said that there would also be «winners,» in particular renewable energies and nuclear power. But at the same time, some Asian countries would resort more to coal.
When asked about the US president’s climate skepticism, IEA’s executive director, who since taking office has promoted policies to reduce dependence on fossil fuels, was diplomatic, not directly criticizing him even though their positions are clearly divergent. EFE
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