NEW THREAT TO TOURISM - WAR CHANGES PLANS FOR AIRLINES AND PASSENGERS - Filenews 2/4
International Energy Agency (IEA) chief Fatih Birol warned yesterday that disruptions in Europe over oil supplies from the Middle East would intensify in April and begin to have a serious impact on the European economy in the same month, as the closure of the Strait of Hormuz limits supplies.
For the time being, Brussels reassures that stocks of motor fuel, as well as natural gas, ensure uninterrupted supply to all sectors of the economy. But they do not hide their concern about a gradual relapse if the war conflagration continues and if the transport of oil and liquefied natural gas products from the Strait of Hormuz does not normalize soon.
As early as Tuesday, Energy Commissioner Dan Jorgensen warned the energy ministers of the member countries that countries should prepare for the ongoing disruption in fuel supply and prices, which in turn lead to rising inflation throughout the economy.
There is particular concern about the stocks of kerosene, which is used by airlines. And in this area it seems for the time being that there are reserves capable of supporting the flight schedules of European airlines in the next few weeks, but with the summer season approaching, along with the large increase in holiday travel, the concern is great.
In fact, one of the recommendations of the competent Commissioner to governments is the promotion of plans for reduced traffic of private vehicles on the roads and restriction of air travel. The problem is already acute in Asian countries.
About 20-30% of the kerosene used by airlines in Europe is imported from Persian Gulf countries, and if the Strait of Hormuz remains blockaded by Iran, sooner or later the problem of adequate airplane supply will become threatening.
Prices for "jet fuel" have skyrocketed and in some cases have almost doubled, resulting in large increases in air tickets as well. This development, if prolonged, is likely to affect as an additional factor the problems with cancellations of bookings in Mediterranean countries, including Cyprus.
A broader issue of competence
According to the International Energy Agency (IEA), more than 12 million barrels of oil have been lost since the start of the US-Israel war against Iran due to Tehran's attacks on infrastructure, resources and energy facilities in the region and due to restrictions on shipping through the Strait of Hormuz.
"The loss of oil in April will be double the loss of oil in March, in addition to the loss of Liquefied Natural Gas (LNG). This will come through inflation and reduce economic growth in many countries," Birol said, speaking on a podcast with Nikolai Tangen, head of Norway's sovereign wealth fund.
Losses of available fuel are expected to widen in April, as many cargoes of oil and LNG that arrived in March had signed contracts before the war and continued to their destinations, he noted.
He reiterated that the IOC is considering a further release of strategic reserves, after the Organization's member states agreed to release a record 400 million barrels of oil.
The current disruption of oil and LNG supply is the worst since the two oil crises of 1973 and 1979, as well as the loss of Russian gas volume due to the Russian invasion of Ukraine in 2022, overall, Birol underlined. About 40 infrastructure and energy facilities in the Middle East have been damaged since the start of the war and will take time to restore, he added.
"We are heading for a big, big disruption and the biggest in history so far," Mr. Birol concluded.
