On Monday, leaders from the International Monetary Fund, World Bank, and International Energy Agency encouraged nations to refrain from stockpiling energy resources and applying export limits, warning that such actions could intensify the most severe disruption to worldwide energy systems on record.
IEA Executive Director Fatih Birol, speaking to journalists following discussions with counterparts from the IMF and World Bank, highlighted that various nations were retaining reserves and enforcing export curbs. He called on all countries to allow energy supplies to reach international markets freely, without specifying any particular nations.
IMF Managing Director Kristalina Georgieva emphasized the principle of ‘do no harm,’ mentioning her engagements with affected countries in Asia, Sub-Saharan Africa, and certain South Pacific islands concerned about resource availability.
She stressed that export restrictions exacerbate market imbalances and noted that a prolonged conflict would heighten negative effects on economic expansion and price increases.
Meanwhile, the U.S. military initiated a blockade of vessels departing from Iranian ports, prompting Tehran to warn of countermeasures against ports in neighboring Gulf states after unsuccessful peace negotiations in Islamabad over the weekend. Consequently, oil prices surged above $100 per barrel, with no immediate prospects for reopening the Strait of Hormuz, a vital route for 20% of global oil and liquefied natural gas shipments.
Earlier, at an Atlantic Council gathering, Birol described the ongoing conflict as the most significant energy upheaval in history, with over 80 oil and gas installations in the Middle East sustaining damage. He indicated that conditions deteriorated from March, when some shipments occurred, and could worsen further this month.
Birol warned that the crisis’s magnitude is enormous, affecting all nations to varying degrees, with none entirely spared.
The heads of these organizations committed to ongoing collaboration in addressing the Middle East conflict, which has driven oil prices up by 50% since starting on February 28. This surge has also elevated costs for gas and fertilizers, raising alarms about food supplies and employment.
Georgieva stated that joint efforts amplify their effectiveness and provide greater support to member countries.
The joint declaration acknowledged the high uncertainty, noting that even if normal shipping through the Strait of Hormuz resumes, restoring global commodity supplies to pre-conflict norms would require time.
Both the IMF and World Bank anticipate revising their economic growth projections downward and inflation estimates upward due to the conflict. The IMF plans to issue updated forecasts on Tuesday, while the IEA will publish its latest oil market analysis. The situation has overshadowed the IMF and World Bank’s spring meetings in Washington this week.
Birol mentioned that the IEA has already disbursed around 400 million barrels from emergency stockpiles and stands ready for additional releases if needed.
