Ireland Braces for Prolonged Energy Market Disruption Amidst Gulf Conflict

Ireland is preparing for weeks of continued disruption to energy markets, with the potential for a “more severe” impact if the conflict in the Middle East persists. This assessment comes from the International Energy Agency (IEA), which briefed the Irish government on the evolving situation and its potential consequences for energy affordability.

IEA Warns of Significant Supply Losses

A recent presentation by the IEA’s top energy economist to Ireland’s energy affordability taskforce indicated that substantial volumes of oil and gas will remain off the market throughout March, even with a gradual resumption of flows towards the end of the month. The IEA highlighted that storage facilities in the Gulf region are nearing capacity, and disruptions to shipping, including attacks impacting facilities, are exacerbating the problem.

According to the IEA, if shipping lanes do not reopen by late March, the impact on global energy markets will worsen. Even if shipments resume, the agency anticipates that supply levels will not return to pre-crisis levels for some time, due to tankers being stranded on either side of the Strait of Hormuz and the time required to restart closed oilfields. The IEA estimates that nearly six billion cubic metres of Middle East gas exports have already been lost, with a further disruption of over 10 billion cubic metres expected even with a swift resolution to the conflict.

Global Energy Security Threat

Fatih Birol, Executive Director of the IEA, described the conflict as “the greatest global energy security threat in history,” warning that politicians and markets may be underestimating its scale. The IEA Member countries unanimously agreed on March 11, 2026, to make 400 million barrels of oil from their emergency reserves available to the market to address disruptions.

Government Response and Support Measures

Despite assurances from industry representatives that Ireland’s fuel supply chains are reliable and contingency arrangements are in place, the Irish government is preparing a package of supports for households to mitigate the impact of rising energy prices. The package, to be presented to Cabinet on Tuesday, is expected to include a temporary cut to excise on fuels, an extension of the winter fuel allowance season, and measures to support hauliers.

The excise cut is initially planned for a limited period of four to six weeks, with the possibility of extension depending on market developments. Tánaiste Simon Harris emphasized the need for agility in responding to the evolving situation.

Impact on European Markets

The IEA presentation also highlighted that disruptions to deliveries are already being felt across key markets, such as northwest Europe, due to the time it takes for shipments to arrive – with some tankers having departed before the conflict began. The agency stressed that restarting oilfield supply chains requires significant capital, expertise, and equipment, and that rushing the process could damage equipment and reservoirs, leading to further losses.

Ireland’s Strategic Reserves

Ireland holds 90 days’ supply of oil stocks, in line with international commitments, and intends to participate in the IEA’s release of strategic reserves. Ireland’s contribution to the IEA’s 400-million-barrel release will be 1.6 million barrels, equivalent to approximately 10.5 days of supply.