Oil ’emergency’: work from home and drive slower, says IEA

The energy watchdog has detailed a 10-point contingency plan that includes reducing highway speed limits by at least 6 miles per hour, working from home for up to three days a week if possible and car-free Sundays in the cities.

Other measures in the contingency plan include increasing carpooling, using high-speed and overnight trains instead of planes, avoiding business jet travel where possible and encourage walking, cycling and public transport.

If fully implemented, the measures would reduce global oil demand by 2.7 million barrels a day in four months, the equivalent of the oil consumed by all cars in China, the IEA said. And the impact would be greater if emerging economies like India and China adopted them in part or in full.

However, the emergency measures would disrupt, or even slow down, a global economy that remains largely dependent on fossil fuels, particularly for transport. The IEA suggests that headaches would be better than the alternative.

“Because of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades, with huge implications for our economies and societies,” he said. IEA Executive Director Fatih Birol said in a statement.

The proposals reflect recognition that the world has few realistic options to quickly replace oil supplies from Russia, the world’s second largest oil producer in 2021.

OPEC has signaled it is in no rush to increase production and the release of emergency oil stocks has done little to allay fears of shortages.

“The United States and other IEA countries now realize that the potential loss of Russian oil exports is a bigger supply shock than strategic stockpile drawdowns or accelerated production increases from Russia. ‘OPEC+ can’t solve,’ said Bob McNally, president of consulting firm Rapidan Energy.

The Russian-Ukrainian crisis has driven oil prices higher over the past month, pushing U.S. gasoline prices to record highs. Although oil prices retreated from their recent highs, oil rallied above $100 a barrel on Thursday on renewed concerns about the impact on Russian energy supplies.


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