UN expert warns of looming fuel deficit amid hot summer and depleted reserves

The world may be on the brink of a fuel deficit crisis, despite current market stability, according to a United Nations expert. Dario Liguti, director of the UN Economic Commission for Europe's (UNECE) sustainable energy division, cautioned that depleted reserves and the onset of an unusually hot summer, exacerbated by a powerful El Niño phenomenon, could trigger a new wave of shortages.

Liguti explained that recent market stability, which might have led some to question earlier predictions of a severe energy crisis, was achieved through a combination of factors. These included increased overland fuel and fertilizer shipments via alternative routes from the Persian Gulf, boosted exports from countries like Venezuela and the US, reduced local demand in parts of Asia, and cautious purchasing by major importers such as China. Furthermore, decreased agricultural chemical use and high prices prompting consumer cutbacks played a role. Significant use of commercial and strategic reserves, including those managed by the International Energy Agency, also helped temporarily offset shortages.

However, Liguti stressed that the danger has not passed. Strategic reserves are now at dangerously low levels. The approaching summer heat will significantly increase energy consumption for cooling, while also impacting water levels crucial for transportation, logistics, and power generation. As the world prepares to build new reserves for winter, global demand reduction remains minimal. Liguti warned that even if tensions in the Strait of Hormuz ease, high prices and supply disruptions are likely to persist for months. He reiterated the call for energy conservation, reduced consumption, and stockpiling.

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Therefore, what we talked about a month ago remains valid: save energy, consume less and stock up.