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‘The damage is done’: global oil crisis has changed fossil fuel industry for ever, IEA chief says (www.theguardian.com)

submitted 1 day ago by Powderhorn@beehaw.org to c/news@beehaw.org

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The oil crisis triggered by the Iran war has changed the fossil fuel industry for ever, turning countries away from fossil fuels to secure energy supplies, the world’s leading energy economist said.

Fatih Birol, the executive director of the International Energy Agency (IEA), also said that, despite pressure, the UK should forgo much of its potential North Sea expansion.

Speaking exclusively to the Guardian, Birol said a key effect of the US-Israel war on Iran was that countries would lose trust in fossil fuels and demand for them would reduce.

“Their perception of risk and reliability will change. Governments will review their energy strategies. There will be a significant boost to renewables and nuclear power and a further shift towards a more electrified future,” he said. “And this will cut into the main markets for oil.”

Birol said there was no going back from the crisis: “The vase is broken, the damage is done – it will be very difficult to put the pieces back together. This will have permanent consequences for the global energy markets for years to come.”

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[–] luisgutz@feddit.uk 13 points 1 day ago (1 children)

I think the argument is not so much for price increases (which we have now) but for the supply restrictions and destruction taking place. First consider that every month that Hormuz remains closed, the world loses about 2% of the yearly supply of oil and gas. Then take into account the long transition of the boats and the damage to wells and refineries means there will be scarcity. Heck, in some Asian countries that is already the case. And the scarcities will be global.

That is already baked into the world economy, just not factored onto the markets.

[–] horn_e4_beaver@discuss.tchncs.de 4 points 1 day ago (1 children)

I also wonder how many shipowners and insurers will be happy to let their ships enter past the strait into the gulf if they're not 100% confident they'll be able to get back out again. If it happens once, the chances of it happening again generally increase.

[–] luisgutz@feddit.uk 5 points 1 day ago

None. The blockade is mostly enforced by the insurers, and the 5 years lead time to buy a new boat. All Iran has to do is fire the odd drone/missiles every once in a while and no ship owner will risk it