Oil, Gas Recovery May Take Two Years After War, IEA’s Birol Says

The recovery will be gradual as damage from the conflict has affected oil fields, refineries and pipelines across the Persian Gulf, Birol said on Bloomberg Television’s Wall Street Week.

That, coupled with the near-closure of the vital energy shipping route, the Strait of Hormuz, has deprived the market of hundreds of millions of barrels of crude and refined fuels.

WSW Birol on Production Disruption – CHUNK

Faith Birol says it could take up to two years to make up for lost oil and gas production.

“There is a general belief that the minute we see the Strait open… we come back to the level of production before — which is, in my view, misleading,” Birol said.

The recovery of liquefied natural gas supply could lag even further, with some terminals taking longer than two years to normalize after suffering damage in attacks.

If the conflict drags on, the biggest hit will be on energy-importing emerging economies, especially in Asia and Africa, Birol said.

Early signs of demand destruction already visible — rationing, reduced activity and rising inflation pressure, he added.