IEA warns countries against stockpiling fuel amid global energy crisis

IEA Director-General Fatih Birol has urged countries to avoid stockpiling oil and fuels and to refrain from export bans or restrictions amid an energy crisis linked to the war in the Gulf. He warned that such measures would further tighten global supply if the Hormuz Strait remains closed for an extended period.

Call to avoid export bans and restrictions

In an interview with the Financial Times, Birol said countries—particularly those with large oil-refining capacity in Asia—should reconsider export bans on gasoline and petroleum products. “I call on all countries not to impose export bans or restrictions. This is the worst time in the global oil market. Trading partners, allies, and neighboring countries will have to bear the consequences of those restrictions,” he said.

Birol’s comments did not specifically mention China. However, the Financial Times reported that China is the only major economy to have imposed export bans on gasoline, diesel, and jet fuel in response to the five-week-old war in the Gulf. India has also imposed an additional export tax on gasoline and oil, adding pressure to the market.

Birol urged “the major Asian countries with large refineries” to rethink any bans, warning that “if these countries continue to restrict or ban exports entirely, the impact on the Asian market will be very serious.”

Stockpiling undermines IEA emergency release plan

Birol also criticized energy stockpiling, saying it undermines the effectiveness of the IEA’s plan to release 400 million barrels of oil and fuel from emergency reserves to stabilize the market.

He said the United States and China have increased their energy stockpiles in recent weeks. The United States is the largest contributor to the planned oil release, but its onshore crude oil inventories are up 5% year on year. China’s inland crude oil inventories are forecast to rise by nearly 120 million barrels in April, reaching 1.3 billion barrels, according to OilX data.

Market pressures and supply risks

The energy crisis has weighed most heavily on Asia, where several countries have begun distributing fuels and shortening workweeks. While diesel and aviation fuel prices in Western countries have risen sharply, Birol said there is currently no shortage of aviation fuel or diesel in Europe.

He warned that the situation could change in the coming weeks if disruption of flows from the Middle East persists.

Birol added that if the Hormuz Strait is not reopened, the world would lose twice as much crude oil and refined products in April as the shortfall in March. He said that even after the conflict ends, returning to normal will take time.

Damage to energy infrastructure

Birol said the IEA is monitoring energy assets in the Middle East daily. “There are already 72 energy assets damaged, and one third of them are severely or very severely damaged,” he said.

Saudi pipeline rerouting and protection concerns

Birol praised Saudi Arabia for its swift response to the crisis. He said Riyadh redirected more than two-thirds of its crude exports through a pipeline to the Red Sea, reducing disruption from a potential Hormuz closure.

Birol said he had been assured by “the highest levels in Saudi Arabia” that the pipeline will be “well protected,” but noted that if a successful attack on the pipeline occurs, the consequences for the global economy would be extremely serious.

Potential longer-term shifts in the energy system

Birol said the crisis could reshape the world’s energy system, drawing parallels to the 1970s oil shocks and the Russia–Ukraine war that began in 2022. He noted that the oil shocks of the 1970s helped spur a nuclear energy boom, improved efficiency for car engines, and accelerated licensing of North Sea oil and gas fields in the UK.

He concluded that the current crisis could trigger a renewal of nuclear energy, a boom in electric vehicles, greater efforts to promote renewable energy, and also encourage some countries to use more coal. Birol said the gas industry—positioned as a reliable energy provider—will need to work to regain its reputation after suffering two shocks within four years.