IEA Advocates Work from Home, Reduced Air Travel to Tackle Oil Shock

The International Energy Agency (IEA) has advocated a set of immediate demand-side measures, including work-from-home, lower speed limits, and reduced air travel to cushion the impact of a historic global oil supply shock triggered by disruptions in the Middle East.

Oil prices spiked to over USD 100 per barrel after the US and Israel attacked Iran and Tehran's sweeping retaliatory actions. For India, which imports about 88% of its crude oil needs, the surge in global prices poses a significant macroeconomic risk -- widening the current account deficit, pressuring the rupee, and increasing fuel costs for households and businesses.

While petrol and diesel prices have so far not been increased, cooking gas LPG rates have been hiked by ₹60 per cylinder.

"The conflict in the Middle East has created the largest supply disruption in the history of the global oil market, due to the near halt in shipping traffic through the Strait of Hormuz," IEA said in a new report.

Some 15 million barrels of crude oil and 5 million barrels of oil products typically traversed the Strait each day, equivalent to about 20% of global oil consumption. Half of India's crude oil imports, 40% of its gas imports and 85-90% of its LPG shipments came through the strait.

"These flows have slowed to a trickle," IEA said. "The loss of supply is having significant impacts in global markets, pushing up prices for crude oil above USD 100% barrel, and leading to much higher prices for some refined products -- notably diesel, jet fuel and liquefied petroleum gas (LPG)." Stating that concerns are growing about the impacts of higher prices on households, businesses and the broader economy, IEA outlined 10 actions for governments, businesses and households to reduce fuel consumption and ease price pressures.

Key steps include promoting remote work to cut commuting fuel use, reducing highway speeds by at least 10 km per hour, encouraging public transport and carpooling, and limiting private vehicle access in major cities.

Additional measures include improving driving efficiency, curbing business air travel, shifting away from LPG for non-essential uses, and enhancing industrial fuel efficiency.

IEA said, "At the national level, three additional remote workdays, for those whose jobs allow for it, could cut oil consumption from cars by 2-6%, with average potential reductions of around 20% for individual drivers." Lowering the speed limit on highways by 10 km per hour can reduce an individual driver's oil consumption by 5-10% and overall oil use of private cars by 1-6%. Heavy freight trucks can save around 5% due to their already lower speeds.

"Shifting travel away from private cars to public transport, such as buses and trains, can reduce national oil use for cars by 1% to 3%," IEA said, adding that a reduction of around 40% of flights taken for business purposes is feasible in the short-term and, with very high participation in work-related flight reduction campaigns, could reduce jet kerosene demand by 7-15%.

The IEA said restoring transit through the Strait remains critical to stabilising markets. Meanwhile, member countries have released 400 million barrels from emergency reserves -- the largest coordinated stock release in the agency's history.

The agency emphasised that while governments may step in to shield vulnerable consumers, limited fiscal space means relief measures must be targeted, with demand reduction playing a central role in managing the crisis.