On the morning of March 3, the day after Iran closed the Strait of Hormuz, Fatih Birol, executive director of the International Energy Agency, arrived at his offices in Paris with an urgent request for his staff. He needed them to run the data to double-check what he had written in his journal late the previous night: “The scale of the crisis we are facing is set to make past oil shocks seem like mere warm-up acts.” Sure enough, staff found: more oil would be lost than in both 1970s oil shocks combined. What to do?
Birol, a genial white-haired Turk who has worked on energy for 40 years, sits at the centre of this crisis. My conversations with him in Paris, and on a visit to Istanbul where we spoke on a panel, helped me understand how today’s world manages a crisis — or not. How much international co-operation survives in the Trump era? What do governments know?
After the strait closed, Birol met and phoned countries’ leaders nonstop. He says: “I was surprised that for three weeks people didn’t realise the scale of the crisis.” For instance, many policymakers hadn’t grasped that supplies of jet fuel would be badly squeezed. The IEA, a small intergovernmental agency with a core budget of €23mn and no legislative powers, would have to take the lead. It held “the world’s best energy data and analysis”, and oversaw reserves of 1.2 billion barrels of oil. On March 11 the agency launched an unprecedented release of 400 million barrels.