Global Energy Crisis: Countries Impose Strict Restrictions Amid Iran War and Hormuz Strait Closure

Following the outbreak of the Iran war on February 28 and the subsequent closure of the strategic Strait of Hormuz, the world is now grappling with what experts describe as the most significant global energy crisis in history. The disruption of oil and gas supply chains has led to skyrocketing inflation across nations, a sharp reduction in international flights, and forced governments to implement drastic measures to stabilize their economies. According to the International Energy Agency (IEA), this situation is evolving into the largest global energy crisis ever recorded, while more than 60 countries have already introduced approximately 200 policies aimed at conserving fuel and mitigating the impact on the general public.

India's Strategic Response and PM Modi's Direct Appeal

In response to this escalating crisis, Indian Prime Minister Narendra Modi issued a comprehensive appeal to the citizens on Sunday, emphasizing the need for collective action, while the Prime Minister urged the public to minimize fuel consumption, postpone non-essential foreign travel, and temporarily halt the purchase of gold to support the national economy. Plus, he advocated for the increased use of public transport, the adoption of work-from-home models where possible, and encouraged farmers to reduce their reliance on chemical fertilizers in favor of natural farming techniques. These measures come as Brent crude prices previously surged to $120 per barrel, Importantly higher than the $70 per barrel benchmark used by many Asian countries for their budgetary planning.

Domestic Price Stability and Industrial Challenges in India

While the Indian government has managed to keep petrol and diesel prices stable through significant subsidies, this has resulted in substantial financial losses for domestic oil marketing companies, while to ensure the continued supply of cooking gas to approximately 33 crore households, the government has mandated a 30% reduction in gas supply to fertilizer plants. This strategic reallocation highlights the severity of the supply constraints.

Severe Measures in South Asia and Major Global Economies

In Pakistan, the government has been forced to implement a 4-day work week, mandate work-from-home for 50% of staff, and close educational institutions for two weeks. China has taken a different route by imposing a strict ban on the export of refined fuels, including petrol, diesel, and jet fuel, as well as fertilizers, to prioritize domestic availability. Indonesia has halted LNG exports and is aggressively pushing its B50 biodiesel program, which utilizes a 50% palm oil blend to reduce traditional fuel dependency. Bangladesh has introduced strict fuel purchase limits and deployed the army at oil depots; the price of LPG cylinders there has jumped from 900 Taka to 1500 Taka, causing a 30-40% drop in garment industry production.

Rationing in Nepal and Strategic Moves by the US and Europe

1 kg of gas to extend existing stocks. 9 million barrels per day in April, domestic petrol prices continued to rise, leading to the suspension of operations by Spirit Airlines. To combat this, the US has authorized the release of 172 million barrels from its Strategic Petroleum Reserve (SPR). Europe, facing a halt in jet fuel supplies from the Gulf, has become increasingly dependent on the US. Consequently, eight European nations, including Germany and Italy, have postponed their plans to shut down coal-fired power plants to ensure energy security.

Economic Forecast and the Risk of Rising Poverty

9 lakh crore rupees) for the Asia-Pacific region. 8 million people into poverty. Industry experts warn that if the Strait of Hormuz remains closed, the costs of fuel, electricity, internet services, fertilizers, and general transportation will continue to climb in the coming months, further straining the global economic fabric.