IEA Warns of Largest Oil Crisis, Urges WFH and Slower Driving
The International Energy Agency (IEA) has warned that the world is facing the largest supply disruption in the history of the global oil market amid escalating conflicts in the Middle East.
In its latest report, the IEA emphasised that relying solely on increased supply is insufficient to curb the surge in energy prices. Instead, reducing demand is seen as the quickest way to alleviate pressure on consumers.
“Addressing the demand side is a crucial and immediate tool to reduce pressure on consumers by improving affordability and supporting energy resilience,” the IEA stated, as quoted from CNBC on Saturday (21/3/2026).
Not only crude oil prices, but also refined fuel prices such as diesel and aviation fuel have skyrocketed. This situation directly impacts transportation costs, logistics, and consumer goods prices.
The IEA noted that heightened geopolitical tensions have shaken markets and amplified global economic uncertainty.
To mitigate these effects, the IEA encourages simple yet highly impactful measures.
“Addressing the demand side is a crucial and immediate tool to reduce pressure on consumers by improving affordability and supporting energy resilience,” the IEA stated.
The most impactful steps include promoting work-from-home (WFH), increasing the use of shared vehicles and public transport, and reducing non-essential air travel.
Working from home can reduce fuel consumption for daily commutes, while driving more slowly, switching from private vehicles to public transport, and restricting vehicle use in cities can curb congestion and fuel consumption.
Additionally, redirecting liquefied petroleum gas (LPG) from the transportation sector to essential needs such as cooking can help keep prices low, including by adopting alternative clean cooking solutions.
On the supply side, several countries are beginning to rely on strategic oil reserves. The IEA has even agreed to release 400 million barrels of oil, described as the organisation’s largest step in history, although the timing of its distribution to the market remains uncertain.
To curb inflationary pressures, some countries are also taking fiscal measures.
Spain is reportedly cutting VAT on fuel to 10% from the previous 21%, while also abolishing electricity tax.
Italy has reduced fuel excise duties, while Germany is preparing policies to protect consumers from price surges, including options for additional taxes on energy companies.
With a combination of supply disruptions and demand surges, the IEA assesses that pressure on energy prices will continue. Without consumption controls, the economic burden is feared to grow heavier for the global population.