The conflict in the Middle East has created the largest supply disruption in the history of the global oil market. The volume of fuel supply offline now is higher than the supply loss during the oil shock of 1973 that led to the IEA’s creation and any disruption since then. Beyond the direct damage to energy infrastructure in the region, the crisis has led to a near halt in tanker movements through the Strait of Hormuz. Crude and oil product flows through the Strait have fallen from around 20 million barrels per day (mb/d) before the conflict to a near standstill. With limited capacity to bypass the waterway and storage filling up, Gulf countries have cut oil production by at least 10 mb/d. In the absence of a rapid resumption of shipping flows, supply losses are set to increase.

This loss of supply is having major impacts in global oil and gas markets, with both producers and consumers feeling the strain. Oil prices have risen sharply since the conflict began. While Brent has drawn most attention, benchmarks for Middle Eastern crudes and refined products, particularly diesel and jet fuel, have increased even more. Many consumers around the world are still bruised from past price increases during the global energy crisis of 2021-2023, which pushed energy affordability to the forefront of energy policy priorities. A succession of turbulent years for the global economy and the energy sector has also depleted the fiscal means for governments to respond to a new crisis.

The resumption of transit through the Strait of Hormuz is indispensable to relieve the strains on markets and to allow for stable flows of oil and gas to international markets. In the interim, countries are taking or considering a range of measures to mitigate the impacts of the disruption, whether by increasing oil supplies or reducing demand.

On the supply side, IEA member countries decided on 11 March to make 400 million barrels of oil from their emergency reserves available to the market, the largest stock release in IEA history. Other short-term options to increase supply, aside from inventories, are being explored. They are quite limited, however, as operators face constraints in terms of project cycle times, equipment availability, and takeaway capacity.

On the demand side, the products most immediately affected by the conflict are diesel, jet fuel, and LPG. Alongside its well-known role as a producer of crude oil, the Middle East is also a major exporter of these refined products and the interruption to these flows has quickly tightened market balances. Jet fuel supplies are scarce despite the reduction in demand due to the suspension of flights at major airports across the Middle East. In addition to its use as a petrochemical feedstock, LPG is widely used as a cooking fuel.  

Demand restraint is one of the emergency response measures that all IEA member countries are required to have ready as a contingency – and that they can use to contribute to an IEA collective action in the event of an emergency like this current disruption. Importantly, opportunities on the demand side are not limited to only IEA countries. Countries around the world need to consider how they react to today’s extreme strains on oil markets.

Governments can support households and businesses to take actions to quickly reduce their oil demand and costs. In this report, the IEA offers 10 options that households, businesses, and governments across the world can pursue immediately to manage their oil demand and help shelter themselves from the oil shock. All 10 options can be implemented quickly, with savings achieved in a matter of weeks.

The description for each option includes estimates of the national savings possible for each specific fuel as well as the implementation levers available to governments and specific country examples. Not all options will apply equally to all countries, depending on their own circumstances in terms of energy markets, transport infrastructure, demand for specific oil products, and other aspects. Nonetheless, the more options that governments, businesses and households adopt would further increase their national, regional and global impact, helping to alleviate the shock for everyone. Even if all 10 options were implemented in every country in the world, however, they would not replace the supply disrupted by the conflict. Only the resumption of transit through the Strait of Hormuz can do that.  

The majority of these 10 options focus on road transport fuels, given cars and trucks’ outsized influence on total oil consumption – roughly 45% globally and up to two-thirds in some regions. However, the options also consider use of oil for air transport and industry. In addition, they seek to prioritise and protect essential uses of LPG, recognising its central importance as a cooking fuel in many emerging and developing economies.

Following descriptions of the 10 options, the report outlines targeted measures governments can employ to support energy affordability, especially for their most vulnerable consumers, and help offset higher expenditures for oil-related products. Finally, it identifies longer-term structural measures available to governments to reduce exposure to future price shocks and volatility.

In responding to the current crisis, governments can take the lead, both through measures they implement for the public sector and through regulations and mandates, complemented by public information and awareness campaigns. Ultimately, however, sheltering consumers from the impacts of the oil shock is not only a matter for national governments. Several of the measures can be implemented directly by other layers of government – such as state, regional or local – or just voluntarily followed by households and companies, enabling them to reduce their consumption of oil and save money.

The IEA was founded more than 50 years ago with a core mission of upholding energy security in response to a global oil shock. The current crisis extends well beyond oil, and includes disruptions to natural gas flows, with knock-on effects for electricity security and prices. The Agency will continue to work closely with governments around the world as they consider and develop options for responding to the current disruption.