IEA says use less to ride out energy price chaos from Iran war

The fastest way to ease the pressure from a global oil shock is not drilling more or releasing reserves, it is using less.

Working from home, avoiding business flights, swapping to cleaner cooking fuels and driving slower are just some of the tips in a new report from the International Energy Agency, to navigate the energy chaos in the wake of the Iran war.

Global markets are reeling every day from the disruption in the Strait of Hormuz, where flows that normally carry around 20% of global oil supply have been severely curtailed.

With roughly 20 million barrels a day typically passing through the chokepoint, the impact has been immediate, pushing crude above $100 a barrel (£79) and driving sharper spikes in diesel, jet fuel and LPG.

Governments have already reached for the obvious lever. The coordinated release of 400 million barrels from emergency reserves is the largest in the IEA’s history and is designed to steady markets in the short term.

But it is not a solution on its own and the agency is clear that supply-side action cannot fully offset a disruption of this scale.

IEA boss Fatih Birol said: “The war in the Middle East is creating a major energy crisis… in the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe.”

The focus is therefore shifting to demand, not as a long-term behavioural change but as an immediate response that can be deployed at scale.

The logic is straightforward, if millions of people and businesses make small adjustments to how they use energy, the cumulative effect can materially reduce pressure on markets and blunt the impact on prices.

Transport sits at the centre of this effort because it accounts for nearly half of global oil demand. The measures being proposed are familiar, from working from home to reducing speed limits but their effectiveness lies in how quickly they can be implemented and how widely they can be adopted.

Even modest reductions in fuel use, when multiplied across entire economies, translate into meaningful savings.

The same principle applies beyond roads. Aviation, industry and household energy use all offer opportunities to ease pressure on constrained fuels, particularly LPG, which is critical for cooking in many parts of the world.

The aim is not to eliminate demand but to prioritise it, ensuring that limited supply is directed towards essential uses while avoidable consumption is reduced.

Set against that backdrop, it has outlined ten immediate actions that governments, businesses and households can take:

• Work from home where possible
  Reduces fuel demand from commuting where roles allow.
• Reduce speed limits by at least 10 km/h (6mph)
  Cuts fuel use across passenger vehicles and freight.
• Encourage public transport
  Shifts demand away from private car use.
• Alternate private car access in cities
  Lowers congestion and fuel-intensive driving.
• Increase car sharing and efficient driving
  Improves vehicle utilisation and reduces consumption.
• Improve freight and delivery efficiency
  Optimises logistics to cut diesel demand.
• Divert LPG from transport to essential uses
  Protects supply for cooking and vulnerable households.
• Avoid air travel where alternatives exist
  Reduces pressure on jet fuel markets.
• Switch to cleaner cooking where possible
  Limits reliance on LPG.
• Improve industrial efficiency and switch feedstocks
  Frees up constrained fuels and reduces overall demand.

The IEA says it is not setting out a list of sacrifices but a coordinated response to a system under strain. The agency argues that thses well-targeted measures can reduce costs for consumers, limit inflationary pressure and avoid the need for the kind of broad, expensive subsidies seen during the last crisis.

The IEA’s argument is that millions of small changes, made quickly, are one of the few tools that can make a difference before supply recovers.

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