Global Energy Crisis Threatens Fertilizer and Diesel Supply
· Dünya Gazetesi
International Energy Agency (IEA) Chief Fatih Birol warned that historic disruptions in global energy supply could lead to a diesel shortage and a fertilizer crisis in agricultural production.
Historic Supply Loss in the Strait of Hormuz
International Energy Agency (IEA) Chief Fatih Birol announced that a historic crisis is unfolding in global energy markets. Stating that the energy loss following disruptions in the Strait of Hormuz is greater than the combined total of the 1973 and 1979 crises and the 2022 Russia-Ukraine gas crisis, Birol described the current situation with the following words:
"the biggest energy crisis the world has ever faced"
Summarizing the situation regarding shipments through the Strait, Birol stated:
"the vase is broken"
According to IEA data, he reported that the transit, which was 25 million barrels per day before the war, has fallen to 15 million barrels per day, and at times has dropped to the 12-17 million barrel range.
Critical Stock Levels for Refined Products
Fatih Birol emphasized that the pre-war supply surplus and the 400 million barrels of strategic oil reserves released by the IEA into the market have been effective in keeping oil prices at the $95 level, but stated that these temporary measures have come to an end. Birol explained that the real major danger is not in crude oil but in refined products like diesel and jet fuel, and that damage to refineries in Russia, reduced exports from China and India, and the depletion of additional supply from the Dangote refinery in Nigeria have locked up the global refined product market.
Diesel and Fertilizer Risk in Agriculture
Fatih Birol drew attention to the fact that the supply bottleneck in refined petroleum products could directly impact agricultural production and the logistics chain, stating that if urgent steps are not taken, there will be significant diesel shortages in addition to flight cancellations. The IEA Chief warned the international community that disruptions in fuel and natural gas supply carry the risk of spilling over into the agricultural sector, and that farmers may face difficulties in obtaining diesel, especially during the approaching planting and harvesting seasons, and critical disruptions in global fertilizer supply could occur.
A New Era in Global Energy Trade
Evaluating the trade strategy implemented during the globalization era, International Energy Agency (IEA) Chief Fatih Birol stated that the following logic is now behind us:
"finding the cheapest product"
Indicating the decisive factor in future energy trade, the IEA Chief explained the primary criterion:
"security"
Birol noted that countries are undertaking higher costs to turn towards reliable suppliers, adding that the Russia-Ukraine war, Middle East tensions, and the technological competition between the US and China are the biggest geopolitical risk areas for the period ahead.