Middle East war: 6 ways countries are responding to the historic energy shock
The Middle East war has caused a historic disruption to global oil supplies, leading to sharp price increases and a widespread energy crisis. Governments around the world are implementing measures to reduce fuel demand and protect consumers. The crisis highlights the growing impact of geoeconomic tensions on global energy systems and broader economic stability.
The war in the Middle East has triggered what the International Energy Agency (IEA) describes as the largest disruption to global oil supplies in history, pushing governments around the world to quickly implement emergency measures to curb demand and protect consumers.
The impact has been immediate and severe. Global oil supply fell by more than 10 million barrels a day in March and the price of oil rose above $100 a barrel, while the price of refined fuels such as diesel and jet fuel rose even faster, according to the IEA.
“The war in the Middle East is creating a major energy crisis, including the largest supply disruption in the history of the global oil market,” IEA Executive Director Fatih Birol said in a statement. “In the absence of a quick resolution, the impacts on energy markets and economies will become increasingly severe.”
In response, governments are taking steps to save energy and reduce domestic demand. Drawing on an IEA energy crisis policy tracker, here are six of the most common ways countries are responding.
1. Work and study from home
Encouraging or requiring remote work and study has become a primary way to reduce fuel demand, as it reduces consumption by reducing both travel and the use of on-site facilities.
Indonesia, for example, has imposed a work-from-home requirement for public sector employees on Fridays, while Myanmar mandates remote work on Wednesdays. Other countries such as Pakistan and the Philippines have imposed four-day workweeks on public servants.
Meanwhile, countries such as Sri Lanka, Peru and Bangladesh have shortened school weeks or increased distance learning.
2. Limit cooling in buildings
Governments are considering the use of buildings and facilities to limit energy consumption.
Thailand, Bangladesh and Cambodia have imposed or encouraged temperature limits on the use of air conditioners in public offices. Jordan has completely banned the use of air conditioners in government offices.
Cooling restrictions are particularly important in warmer climates, where spikes in electricity demand can overload already strained energy systems.
In March, smoke rises in the oil industrial zone of Fujairah, in the United Arab Emirates. Image: REUTERS
Transportation remains one of the biggest levers for reducing oil demand and governments are taking steps to reduce private travel and increase the use of public transportation.
Lithuania, for example, has reduced local train fares by 50% for two months, while the Philippines has offered free bus rides to students and workers in selected cities. Meanwhile, France has renewed plans for social leasing of electric vehicles for low-income people who rely on private cars to work. Chile has also offered financial assistance to taxi drivers who purchase electric vehicles.
Other countries such as Thailand and Argentina have changed their regulations to allow higher bioethanol content in gasoline blends.
4. Restrict government travel
Travel in the public sector is being reduced to reduce fuel consumption and set an example.
South Korea has imposed driving restrictions for public sector workers, while Jordan and Pakistan have banned international travel for public officials. Jordan has also limited the reception of foreign delegations.
Sri Lanka has also limited travel by government officials, encouraging them to use public transport.
5. Impose price caps and provide subsidies
Some governments are intervening directly in fuel markets to protect households and businesses from rising costs.
Croatia and Hungary, for example, have imposed limits on fuel prices, while the Czech Republic has capped retailers’ profit margins. China has capped domestic refined oil prices and Japan has introduced a fuel price cap backed by subsidies.
While these measures provide immediate relief, they entail fiscal offsets and may weaken incentives to reduce consumption.
6. Launch energy saving campaigns at the national level.
In addition to political mandates, governments are directly appealing to citizens to change their behaviors.
Australia has encouraged voluntary reductions in fuel use and energy consumption through its “Every Little Bit Helps” campaign, while Egypt has asked the public to limit private and commercial lighting and reduce business hours on weekends.
Several other countries, including Mozambique, the Lao People’s Democratic Republic, Ethiopia and Vietnam, have urged the public to take steps to save energy.
Geoeconomic confrontation and global risks
The global energy-saving measures mark one of the most widespread demand reduction efforts in decades. Furthermore, they underline the significant impact that geopolitical and geoeconomic conflicts are increasingly having on the global economy.
In January, the World Economic Forum’s 2026 Global Risks Report ranked geoeconomic confrontation as the top concern for risk professionals in the near term, with respondents identifying it as the risk most likely to trigger a material global crisis in 2026. State armed conflict followed in second place.
“Geoeconomic confrontation threatens the core of the interconnected global economy,” the report states, noting that such confrontations are both a cause and a consequence of the weakened multilateral system. “With fewer multilateral constraints on unilateral action, growing national barriers and conflicting interests could have negative economic and social repercussions around the world.”
