Iran war triggered most severe oil shock ever, the International Energy Agency says [View all]

Source: msn/ABC News

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The Iran war set off the "most severe oil supply shock in history," the International Energy Agency (IEA) said in a new report on Tuesday, warning that high prices would slash demand for crude, the primary lifeblood of the global economy. In March, oil prices notched their largest one-month gain ever, the IEA said.

The IEA -- a Paris-based group made up of 32 member nations, including the U.S. -- warned of a widespread bout of “demand destruction" in the report. Under such a scenario, high prices would make oil unaffordable for many buyers, forcing them to find alternatives or forgo energy use altogether.
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The conflict, which began on Feb. 28, prompted Iran's effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the global supply of oil and natural gas. Oil demand is expected to fall 80,000 barrels per day (bpd) this year as elevated prices persist, the IEA said, marking a sharp decline from year-over-year growth of 640,000 bpd forecasted in the group’s previous monthly report.

"Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific," the IEA said. "However, demand destruction will spread as scarcity and higher prices persist."

Read more: https://www.msn.com/en-us/money/general/iran-war-triggered-most-severe-oil-shock-ever-the-international-energy-agency-says/ar-AA20TlWG