IEA: The Current Oil Crisis is More Severe Than Those of 1973, 1979, and 2002 Combined

IEA cautions that the global energy disruption is unparalleled due to the Hormuz blockade, which is exacerbating the crisis, while long Covid is costing major economies $135 billion annually.

The head of the International Energy Agency (IEA), Fatih Birol, has cautioned that the ongoing oil and gas crisis caused by the blockade of the Strait of Hormuz is “more serious than the ones in 1973, 1979, and 2002 combined.”

Birol’s warning came out with a new study showing that the long-term health issues from Covid-19 are expected to cost 38 major economies in Europe, the Americas, and East Asia—known as the OECD countries—about $135 billion each year, with these effects likely lasting for at least ten years.

In an interview conducted in France, the head of the IEA remarked, “The world has never faced a disruption to energy supply of such magnitude.”

He stated that European countries, along with Japan, Australia, and others, would experience negative impacts; however, the nations most vulnerable are developing countries, which would face increased oil and gas prices, rising food costs, and an overall surge in inflation.

Last month, the member countries of the IEA reached an agreement to release a portion of their strategic reserves. Birol stated that some of the reserves had already been released, and the process is ongoing.

In response to strikes by Israel and the US, Iran nearly completely obstructed traffic in the Strait of Hormuz, a crucial passage for approximately 20 percent of the world’s oil and gas, leading to a spike in energy prices.

In the meantime, the impact of long-term illness experienced by individuals following Covid-19 infections was projected to cost 38 major economies across Europe, the Americas, and East Asia—specifically OECD countries—approximately $135 billion annually, hindering their economies for around a decade.

The OECD study revealed that the direct healthcare costs associated with long COVID infection, along with the broader impact of individuals exiting the workforce and decreased productivity, will have enduring consequences.

The OECD suggests that economic growth may decline by up to 0.2 percent due to the ongoing spread of the virus, which is increasing the number of individuals affected by long Covid.

The OECD study published on Wednesday indicated that the anticipated impact on GDP due to reduced productivity, higher absenteeism, or employees leaving their jobs will far exceed the additional health spending pressures resulting from the illness.

This paper represents a unique effort to measure the economic impacts of long COVID, a condition that significantly affects those who experience it yet is still not well understood in scientific terms and lacks consistent data monitoring.

“This work is significant as it offers, for the first time, a thorough estimate of the economic burden of long COVID across EU and OECD countries,” stated Guillaume Dedet, the publication’s coordinator and a senior health economist at the Paris-based organization.

Dedet stated, “The report indicates that the costs of Covid-19 did not conclude with the acute phase of the pandemic: the virus persists and will continue to impact societies and economies for years ahead.”

The report projected losses ranging from 0.1 to 0.2 percent of GDP, translating to an annual total loss of $135 billion across all OECD countries, in scenarios where “low or moderate” residual coronavirus transmission resulted in continued new cases.

The report indicated that the economic impact of long Covid is significant, primarily arising from the indirect costs associated with decreased productivity and workforce participation.

It noted that its predictions were likely an underestimate of the actual burden.

The OECD indicated that the consequences were more severe as they compounded existing issues, such as slow growth and productivity challenges in aging workforces.

Economists faced challenges in measuring the impact of long Covid on employment and economic growth, as few countries maintained records of individuals affected by the condition following the peak of the pandemic.

The OECD utilized recent survey data from the US that indicates a persistent rise in health-related absenteeism and departures from the labor market, alongside academic research from the UK, Australia, and other regions.

It stated that all accessible data from high-income nations conveyed a unified message: “ongoing post-infection symptoms represent not just a health issue but also a significant hindrance to economic productivity.”

The report indicated that although numerous countries had established policies for the recognition and response to long COVID, significant gaps frequently persisted. The provision of long-term care pathways for patients, along with the training and support of healthcare workers, was included.

The paper indicated that government action regarding long Covid tends to concentrate on the health sector, with insufficient coordination with policies related to employment, education, and social protection, which can hinder comprehensive support for affected individuals in their daily lives and recovery processes.

Long Covid is defined as a condition that endures for at least three months after the initial viral infection, affecting an estimated 18 million adults in the United States.

Individuals experiencing these issues report symptoms such as shortness of breath, fatigue, cognitive decline, and brain fog, which can persist for months or even years.

Scientists still don’t know exactly why some people get long Covid or what the best ways to treat it are. Research indicates that the viral infection prompts an increased immune response and persistent inflammation in individuals with long COVID, suggesting that mitigating these factors could be a potential approach to addressing the condition.