amounts of oil and gas we\u2019ve lost, is bigger than all those three put together,\u201d Birol stated. According to data received two hours before the seminar, Birol confirmed that 80 energy facilities in the Middle East had been damaged, with over one-third of those having been severely damaged.<\/p>\nThe IEA has played a significant role in the global response to the war. \u201cOur job is to have a real-world impact,\u201d said Birol. Earlier in the conflict, after making clear to policymakers and members of the press the scale of the problem at hand, the IEA turned to its member countries \u2014 which are required to have significant oil stock reserves \u2014 to bring their reserves to the market. \u201cSince the disruption was so big, we brought all the countries together, which is not easy,\u201d Birol said. \u201cWe released 400 million barrels of oil, which is the highest we have ever done. This calmed markets and put downward pressure on prices.\u201d The IEA also released a suite of recommendations for conserving oil quickly, many of which countries around the world are already implementing, said Birol.<\/p>\n
The implications of this crisis are far-reaching, and will vary in severity depending on how long the war lasts and how quickly normal operations resume afterwards \u2014 which could take some time, considering the extent of the damage to the Middle East\u2019s energy infrastructure, Birol said.<\/p>\n
Birol explained the more immediate impacts of the war on the gas industry. Although the natural gas industry has presented itself as a reliable, affordable, and flexible energy source, Birol highlighted that the two major gas crises in the last four years have brought that assertion into question.<\/p>\n
\u201cIs [natural gas] still reliable? Is it still flexible? Is it still affordable? After these two big crises, the natural gas industry needs to work hard to regain its brand,\u201d he said.<\/p>\n
Birol also outlined three potential outcomes that this shift may bring to the renewable energy sector. First, there is historical precedent for building up nuclear power plants in response to the oil crises of the 1970s. \u201cAround 45 percent of nuclear power plants operating today were built as a response to those crises,\u201d said Birol. He believes there will be another large push for nuclear power, including small nuclear reactors.<\/p>\n
Second, renewables may be the biggest beneficiaries of this situation, he said. \u201cIn Europe, after Russia\u2019s invasion of Ukraine, the renewable annual installations increased by a factor of three,\u201d he said.<\/p>\n
Third, especially in Asia, we will likely see an increase in the market penetration of electric vehicles, Birol said. This is especially important to note because Asia is the center of current oil demand growth, but the adoption of more electric vehicles could have an impact on that, he suggested. Previous crises have also led to car manufacturers improving the fuel efficiency of their cars.<\/p>\n
\u201cThe energy security premium will be a factor of the energy trade in the future, in addition to the cost of energy,\u201d said Birol, speaking to the longer-term effects on the global energy market. \u201cCountries will be more careful now with whom they are trading.\u201d<\/p>\n
Addressing the current crisis also necessitates changes to our energy system going forward, according to Birol. He explained that the entire global economy is being held hostage by the 50 kilometers of the Strait of Hormuz, which is a critical path not only for oil and gas shipments, but for materials used to make fertilizer, which are needed to feed the world\u2019s population, and materials such as helium, which are needed to manufacture products like cell phones.<\/p>\n
\u201cI’m afraid that after this is finished, some of the countries will come back faster because they have stronger financial muscles, better engineering capabilities, and better technologies, whereas other countries will suffer,\u201d he said. \u201cIt will be, in my view, not easy for the global economy. I believe who will be suffering under this economic damage will be mainly developing countries.\u201d<\/p>\n
The burden on developing countries will not only come in the form of energy prices, but also lasting impacts on fertilizer consumption, food security, and food prices, which Birol emphasized is a global problem. \u201cWhat should be the response to have a more secure, but also more sustainable, future for everybody?\u201d he asked.<\/p>\n
Birol suggested the best possible outcome to the current global energy and economic disruption would be if the ceasefire leads to a peaceful settlement of the war. Still, this \u201cbest possible outcome\u201d includes significant risk for much of the world.<\/p>\n
If there is a settlement of peace, Birol said he expects oil and the gas production in the region to restart. He noted that there are about 200 fully laden oil tankers and 15 loaded liquid natural gas ships that could leave the Gulf fairly quickly if the Strait of Hormuz fully reopens.<\/p>\n
\u201cBut I don\u2019t think that in a very short period of time we will go back where we were before the war,\u201d Birol said. \u201cAnd this may keep the prices at elevated levels. This is surely not good news, especially in the emerging world. I would be surprised if we don\u2019t see significant inflationary pressures in Asian developing countries, in Africa, and in Latin America,\u201d Birol said. \u201cIn addition to that, the petrochemical industry, fertilizers, we will discover how important those commodities are for the supply chains we have \u2026 I expect a bit of volatility in the markets.\u201d<\/p>\n
This speaker series highlights energy experts and leaders at the forefront of the scientific, technological, and policy solutions needed to transform our energy systems. Visit\u00a0the MIT Energy Initiative\u2019s events page<\/a> for more information on this and additional events. The series will return this fall.<\/p>\n","protected":false},"excerpt":{"rendered":"One day after the announcement of a ceasefire between the United States and Iran, the head of the…\n","protected":false},"author":2,"featured_media":443632,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,207563,161309,41366,207566,207564,85,167332,117780,46,207562,207565,114994,74283,162520,2965],"class_list":["post-443631","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-earth-day-colloquium","tag-energy-crisis","tag-energy-infrastructure","tag-gas-price-inflation","tag-global-recession","tag-il","tag-international-energy-agency-iea","tag-iran-war","tag-israel","tag-mit-energy-initiative-mitei","tag-oil-amp-gas-industry","tag-strait-of-hormuz","tag-ukraine-russia-war","tag-war-in-the-middle-east","tag-world-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/443631","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=443631"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/443631\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/443632"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=443631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=443631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=443631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}