The global surge in energy prices is no longer driven solely by Iran war-related supply disruptions. Now, hoarding behavior across governments, companies, and traders reacting to uncertainty in oil markets is also playing a role.
According to a report by The New York Times, as the conflict in the Middle East has choked oil and fuel shipments from the Persian Gulf, wealthy economies including the United States, Europe, China, and Japan, have been able to pay more to secure what they need.
Poorer countries, especially in parts of Asia, sub-Saharan Africa, and Latin America, are being left exposed to shortages and punishing prices. That dynamic, some economists say, looks a lot like hoarding.
The International Monetary Fund, World Bank, and International Energy Agency jointly warned countries this month not to hoard energy supplies or impose export controls, saying such moves would deepen what they described as an unprecedented shock to global energy markets. IMF Managing Director Kristalina Georgieva summed up the message in three words: “Do no harm.”
Eswar Prasad, an international trade expert at Cornell University, told the Times that “Once again, a large unanticipated shock hits the world economy and it’s every country for itself. This is not the world in it together and trying to sort out the problem jointly. Every country is going into survival mode.”
Fear of scarcity drives governments and companies to buy more fuel than they immediately need. Those extra purchases further tighten supply, pushing prices even higher and convincing others to do the same. In other words, the panic helps create the shortage it fears. Isabella Weber, an economist at the University of Massachusetts, Amherst, told the Times that “Rationing by price explosion ends up being fundamentally unjust.”
Reuters has documented the same pattern in recent weeks. China moved to curb refined fuel exports in March, while Thailand banned exports of refined oil products, including jet fuel, to most countries. Those restrictions were meant to shield domestic consumers, but they also worsened supply pressure for importers elsewhere in Asia.
Reuters has also reported that countries such as Vietnam, Myanmar, and Pakistan were among those hit the hardes by the fallout.
The consequences are spreading beyond gas stations. In Europe, Lufthansa said Tuesday that it would cut 20,000 flights through October to save fuel as jet fuel prices soar.
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