IAEA urges world to reduce oil consumption after Ukraine invasion

After Russia invaded Ukraine, the International Energy Agency urged governments to implement measures to reduce global oil consumption within a few months.

The United States and Canada have sanctioned Russia by banning imports of oil, as well as calling on the OPEC group of oil-producing nations to help relieve the strain on markets, while warning that the world faced the biggest shock to supply in decades because of the outbreak of war in Ukraine.

The IEA warned of the risk of a global supply crisis as major oil companies, trading houses, shipping firms and banks shunned Russia earlier this week.

With the threat that Russian oil supplies could be cut even more, there is a real risk that markets tighten further and oil prices escalate significantly in the coming months as the world enters peak demand season, according to the IEA.

As a result of Russia's brutal aggression against Ukraine, the world may be facing its biggest oil supply shock in decades, with huge implications for our economies and societies, IEA Executive Director Fatih Birol said in a statement.

After the disappointing outcome of the recent monthly meeting of OPEC the IEA report concluded, increases in supply of the crucial commodity wouldn't be able to ease the current strains.

Even after Russia invaded Ukraine, theOPEC group agreed to modest increases in output at its regular meetings, despite the fact that the US government has refused to step up production for months.

The IEA was hoping for some good messages that could help to relieve the strain on the oil markets after the group's next meeting on March 31, Birol said at a press conference that he planned to present a plan to cut demand.

The IEA has proposed 10 proposals that could reduce oil consumption in advanced economies by 2.7 million barrels a day in the next four months.

The measures, put forward by the French government, could reduce consumption of those countries by 2.7 million barrels a day, while these consume between 44 and 45 million barrels a day, according to IEA estimates.

The world's advanced economies account for about 45 percent of global oil demand, according to the world's advanced economies.

The proposals, mostly aimed at transport, included reducing speed limits and working from home three days a week, car-free Sundays, cheaper public transport and greater use of long-distance trains over planes.