Global oil demand has fallen steeply since the start of the Iran war, recording its largest quarterly decline since the global financial crisis (aside from the Covid pandemic), according to an International Energy Agency report covered by the Financial Times. The newspaper continues: “The IEA, the world’s oil watchdog, said soaring prices, shortages of supplies and the near-total loss of air travel in the Middle East had led to a drop in demand that was almost unprecedented in its speed and severity. Global oil demand fell 3.4% in March and is expected to tumble a further 1.1% in April to 100.4m barrels a day, its lowest in more than three years.” The article adds that “while huge uncertainty remains around the annual outlook for the global oil balance, with much hinging on whether the strait of Hormuz will reopen, the IEA said demand for 2026 as a whole was now expected to fall”. It continues: “That would be the first annual decline, excluding the pandemic, since the world’s economy froze up in 2009 during the biggest economic recession since the Great Depression.” The Times reports that IEA forecasts that the war will “force global oil demand 80,000 barrels a day lower this year”. Reuters says the forecast “sweeps away previous expectations of a sizable surplus in 2026”. 

MORE ON ENERGY CRISIS

• Agence France-Presse: “Sixteen experts urge IEA to accelerate the clean energy transition.”
• The Independent covers new analysis from the Centre for Research on Energy and Clean Air finding that global fossil fuel power output fell 1% year-on-year in March, as “solar and wind power shielded the world from the worst impacts of the energy crisis”.
• Canada prime minister Mark Carney has announced he will suspend gas fuel duty in response to the global energy crisis, reports Bloomberg.
• Reuters: “Russia’s oil and fuel export revenues rebound in March, IEA says.”
• Bloomberg: “Malaysia’s biggest solar firm sees jump in demand on Iran War.”
• Ireland’s nationwide fuel protests have spread to Northern Ireland, says the Financial Times.

Several publications report that US president Donald Trump has once again called for the UK to expand new oil and gas production in the North Sea, telling prime minister Keir Starmer: “Drilly, baby, drill!” The Independent says that Trump added that “Aberdeen should be booming” in his latest social media tirade against the UK, while repeating his demand for there to be “no more windmills” in Scotland. The Daily Telegraph leads on Trump also posting that it is “absolutely crazy” that the UK is not pursuing new drilling. There is further coverage in the Daily Mail and the Wall Street Journal. [Carbon Brief analysis shows that the UK’s gas production in the North Sea is set to drop 99% by 2050, when compared to 2025 levels, with new drilling licences pushing this figure down only slightly to 97%. See more North Sea myths debunked in Carbon Brief’s factcheck.]

Elsewhere, there is continued coverage of the news that the UK’s National Energy System Operator (NESO) is to offer households and businesses financial incentives to use more electricity when there is abundant renewable energy supply. The Independent and Guardian focus on how households could get “free electricity”, while right-leaning titles, such as the Daily Mail, Daily Telegraph and Daily Express, incorrectly claim the news suggest that solar power could “overwhelm” the UK grid.

MORE ON UK

• Financial Times: “UK races to secure coal to keep British Steel furnaces operating.”
• The Independent reports on how more people in the UK are considering electric vehicles as the global energy crisis pushes petrol prices up.

The European Union plans to reduce electricity prices and roll out clean energy more quickly to reduce people’s exposure to soaring oil and gas prices driven by the Iran war, according to a draft document seen by Reuters. The newswire reports: “The draft European Commission proposal, due to be published on 22 April, sets out ⁠short-term measures aimed at curbing energy bills, as well as plans to wean Europe off fossil fuels ​faster, to protect the continent from future oil and gas supply disruptions.” It quotes the draft as saying: “The benefits of this transition clearly outweigh its ​costs. Europe cannot afford to remain exposed to increasingly frequent energy shocks. Every delayed investment in the energy transition risks greater cost for society at a later stage.” Reuters adds: “The EU executive in May will propose legal changes to the bloc’s taxation ​rules that would ensure electricity is taxed at a rate below that of fossil fuels, and make ​it easier for governments to cut energy-intensive industries’ electricity taxes to zero, according to the draft.”

Bloomberg also has the story, noting the plan will be called “AccelerateEU”, according to its view of the draft. It continues: “The EU’s plan will be based on five pillars, including boosting coordination among member states on issues such as filling gas storage sites and releasing oil reserves, targeted support for consumers and industry, decreasing consumption of oil and gas, boosting electrification and spurring investments in the transition.”

MORE ON EU

• In a document seen by Reuters, European airlines have urged the EU to step in with emergency measures to tackle repercussions from the Iran war, including mounting concerns over jet fuel shortages.

The Pacific island nation Tuvalu is to host a summit of world leaders ahead of this year’s COP31 climate summit, according to the first letter from the Turkish president-designate of the talks, reports the Guardian. It continues: “Turkey’s climate minister, Murat Kurum, is president-designate for the November summit, set to see world leaders meet in Antalya to thrash out new targets for cutting carbon emissions. After a drawn-out fight with Australia over hosting rights, Kurum used his first letter to global partners overnight to announce plans for the pre-summit meeting to take place in Fiji in October. He and Bowen, Australia’s energy and emissions minister, will also convene a special leaders’ event in Tuvalu as part of the preparations.” The news comes just as Tuvalu has been forced to declare a state of emergency due to a fuel crisis driven by the Iran war, says Bloomberg.

Climate Home News notes that Turkey will also separately hold a “COP31 World Leaders’ Summit” in Antalya over 11-12 November. The publication continues: “Previous leaders’ summits have taken place on the first two days of the COP negotiations or, at last year’s conference in Belém, before the start. But this year’s gathering will take place on the third and fourth day (Wednesday and Thursday) of the 9-20 November talks. Kurum said the summit ‘will be a key moment in generating political momentum and visibility for COP31’.”

Chinese oil imports fell 2.8% in March and gas imports hit their lowest level since October 2022 amid the war in the Middle East reports Bloomberg, citing data from China’s General Administration of Customs. Reuters cites Emma Li, analyst at ship-tracking firm Vortexa, saying China’s March imports “were not yet affected by strait of Hormuz disruptions” because of the front-loading in January and ⁠February. The Hong Kong-based South China Morning Post (SCMP) reports that in the first quarter of the year, China’s electric vehicle (EV) exports rose 77.5% year-on-year, with those of batteries and wind turbines increasing by around 50%. The export surge of Chinese batteries reinforces “early signs of demand for alternative power sources to counter the global energy-supply crunch”, according to Bloomberg. However, the outlet says it was “likely also driven by the front-loading of shipments” before the end of the export tax rebate.

Meanwhile, Chinese president Xi Jinping has told Abu Dhabi Crown Prince Sheikh Khaled bin Mohammed that China will continue to “play a constructive role” in the Middle East in his first public statement on the conflict, reports Bloomberg. Sheikh Khaled bin Mohammed said he is willing to cooperate with China to prevent greater impacts on global energy security, according to state news agency Xinhua. Xi also told Spanish prime minister Pedro Sanchez that China and Spain should strengthen cooperation in areas including new energy, according to Xinhua. China is willing to cooperate with New Zealand on ecological legislation, low-carbon development and climate change, said China’s top legislator, Zhao Leji, during a meeting with New Zealand’s Gerry Brownlee, reports Ideacarbon. The state-supporting Global Times claims that the Philippines’ approach to provoking China over the South China Sea issue while seeking “energy help” is “unsustainable”. Finally, Xinhua reports that “China firmly opposes Britain’s exclusion of Chinese wind turbines”.

MORE ON CHINA

• The EU launched ⁠its critical minerals procurement platform to reduce dependence on China, reports the SCMP. 
• The SCMP says the EU approved a plan to “stop EU funds from going to clean technology projects containing Chinese inverters”.
• Zimbabwe granted two Chinese mining firms export quotas for lithium two months after export suspensions of the material, according to Reuters.
• Angela Wilkinson of the World Energy Council told Caixin the global energy transition could be delayed decades if countries do not utilise China’s production capacity.
• BJX News reports that the signing of a memorandum of strategic cooperation for the China-Russia hydrogen corridor took place in Shanghai.
• Financial Times: “China shock 2.0: the flood of high-tech goods that will change the world.”

India “quietly” withdrawing its bid to host COP33 “reflects a shift in global priorities, with COP wielding less status than previously amid global instability and the pull of priorities at home”, climate experts tell Deutsche Welle. Hosting the talks “would have placed India at the centre of the next global stocktake cycle”, the story adds, which would mean “intensified scrutiny of its coal dependence [and] emissions trajectory”, but also its “engagement with dissenting and activist voices, non-state actors and civil society”. Jayanta Basu, a Kolkata-based climate expert quoted in the story, suggests that the Indian government is “recalibrating its priorities ahead of the 2029 general elections”, while others tell the outlet that “[h]osting COP33 would come at a cost…to support a global process that, from India’s perspective, has not delivered fairly for the global south”. 

The NewsMill quotes India’s former environment minister and opposition MP Jairam Ramesh saying that the decision to withdraw “undermines India’s commitment” to the Paris Agreement and that the government “intended to use COP33 for electoral advantage”. Ramesh points out that by 2028, the Intergovernmental Panel on Climate Change’s seventh assessment report “may get published”, the story continues, which “could put greater pressure on India as the chair to forge a new consensus that would undoubtedly involve a scaling up of ambitions not just for a distant future”.

MORE ON INDIA

• India and the US are “likely to finalise big-ticket [energy] agreements” in “coming days and weeks” after prime minister Modi and Trump discussed the strait of Hormuz yesterday, the Economic Times reports.
• The war on Iran “has exposed the limits of [India’s] outdated, rickety grid, which is struggling to deliver reliable, affordable power”, the New York Times writes. 
• The India Meteorological Department forecasts that the south-west monsoon “could be below normal or deficient in 2026”, Down To Earth reports. Around 60% of the country’s farmers “are completely dependent on monsoon rainfall”, it adds.
• Analysis by the Times of India shows that out of 13 El Niño years, India’s monsoon “was deficient or severely deficient” in seven of them.
• The Japan Times reports that “[p]rotests are rippling across rural India” against proposed new ethanol plants, as India expands its biofuel programme.   

The Financial Times Lex column examines how countries globally could face oil shortages as disruption to supplies from the Middle East continues. It says: “Countries that were particularly dependent on the Gulf for oil and refined products – mostly in Asia – are the first to suffer. That group includes South Korea, India, Malaysia and Singapore…Much of Asia has therefore begun dabbling in demand containment: remote working for public servants, limiting air conditioning and encouraging public transport. Australia is notable for suffering potential knock-on effects. It imports most of its refined products from Asian hubs. With China and South Korea restricting exports, it too faces the threat of scarcity and panic-buying at petrol pumps.” It continues: “Should the strait remain closed for a prolonged period, however, it may not be those early sufferers who experience the most pain…At that point, the determinant of scarcity shifts back from where you are to how much you can pay. Some Asian countries are disadvantaged on both counts. But Australia is likely wealthy enough to attract fuel cargos from other suppliers, including the US. That’s where things become tricky, though, because the wealthy in a poor country may outcompete the poor in a wealthy country.”

MORE COMMENT

• The Daily Telegraph’s Ambrose Evans-Pritchard says: “The quick fixes to the global energy crunch have largely been exhausted.”
• A commentary in Reuters says the war could reignite Australia’s “green iron ambitions”.
• The Daily Mail carries a column by Conservative shadow chancellor Mel Stride that claims the Labour government is “refus[ing] to row back on their net-zero obsession that leaves us reliant on imported energy while our own oil and gas sits untapped”.
• The climate-sceptic Daily Telegraph issues yet another editorial calling for more North Sea oil and gas drilling. The Daily Telegraph also has another column from climate-sceptic “energy consultant” Kathryn Porter falsely claiming that the “rush to solar is imperilling the grid and driving up bills”. 
• An editorial in Sun says Keir Starmer has “no plan on how to deal with soaring fuel prices”, adding: “Shortages are expected by the end of this month.”

This edition of the Daily Briefing was written by Daisy Dunne, with contributions from Henry Zhang, Anika Patel and Aruna Chandrasekhar. It was edited by Robert McSweeney.

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