Stock picture of a British Airways plane taking off from London Heathrow Airport.
Stefan Rousseau – Pa Images | Pa Images | Getty Images
The International Energy Agency’s head warned Thursday that Europe maybe has six weeks left of jet fuel as the airline industry continues to grapple with headwinds due to the Middle East crisis.
IEA Executive Director Fatih Birol said the Strait of Hormuz blockade will result in “the largest energy crisis we have ever faced,” in an interview with the Associated Press on Thursday.
“In the past there was a group called ‘Dire Straits.’ It’s a dire strait now, and it is going to have major implications for the global economy. And the longer it goes, the worse it will be for the economic growth and inflation around the world,” he said.
He added that the broader economic impact includes “higher petrol (gasoline) prices, higher gas prices, high electricity prices,” with some parts of the world “hit worse than the others.”
Birol previously warned that the energy crisis was set to hit harder in April as oil supply constraints worsen.
“In April, there is nothing,” Birol said last month. “The loss of oil in April will be twice the loss of oil in March. On top of that you have LNG and others. It will come through to inflation, I think it will cut economic growth in many countries, especially emerging economies. In many countries the rationing of energy may be coming soon.”
Analysts echoed similar warnings to CNBC earlier this week, with Claudio Galimberti, chief economist at Rystad Energy, telling CNBC’s Ritika Gupta on “Europe Early Edition,” on Tuesday that the situation facing airlines “pretty much depends on how many barrels will be flowing through the Strait.”
Rico Luman, senior economist at ING told CNBC’s “Squawk Box Europe” on Tuesday: “We’ve seen these vessels now stopping, so supplies from the Middle East have run out, and we need replacements.”
This is a breaking news story, please check back for more updates.