IEA chief says Iran war will redraw global energy map

Investing.com -- The Iran conflict will fundamentally reshape global energy trade, International Energy Agency Executive Director Fatih Birol said Tuesday, as nations reassess their energy partnerships amid heightened tensions.

Speaking at Semafor World Economy, Birol said the world will not return to previous energy arrangements after the Strait of Hormuz reopens, following a US blockade of Iranian ports this week.

The IEA chief predicted a global transformation comparable to the 1970s energy shocks, which spurred nuclear power expansion and reshaped the auto industry, and Russia's 2022 invasion of Ukraine, which accelerated renewable energy growth.

Countries will increasingly prioritize energy security and add risk premiums to trade based on potential disruptions and whether suppliers might use energy as leverage, Birol said.

"Trustworthiness [and] predictability will be very important in the energy trade and energy security," he said. "Which trade partners we are going to use will be a major, major chapter in the energy business."

Birol said the IEA, whose member countries agreed last month to release 400 million reserve barrels of oil, remains prepared to act quickly to support global supply if needed. He noted such discussions are ongoing.

The IEA director warned that oil releases serve only as a temporary measure, adding that April will prove more challenging for global energy markets than March, as the final tankers that passed through Hormuz before the conflict reach their destinations.

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