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Oil shortages disrupt work and travel

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March 31 – Hello!

Countries around the world are worried about the fallout of the US-Israeli war against Iran while the price of oil is rising, which leads other nations to implement emergency measures to prevent the consequences of gas shortages and rising prices.

About 20% of the world’s oil was transported through the Strait of Hormuz before the war halted supplies, which caused the price of Brent to rise by 59% in March, the highest monthly gain in history. It stood at $115.66 per barrel when the market opened on Monday.

We will look at how Australia, South Korea, Indonesia, Nigeria and Ethiopia have been affected by the war and the energy conservation measures they have used to protect households from rising prices such as fuel tax cuts, car bans and work at home policies.

Check out last week’s articles on how the conflict in the Middle East has affected Europe and Africa’s power policies.

I’ve been keeping my eye on some of the government’s stories about digital trade negotiations going on at the World Trade Organization and other major trade agreements:

What is the World Trade Organization’s e-commerce moratorium?
The WTO faces new challenges as reforms hit a wall at the Cameroon conference
EU and CPTPP agree to move forward with “historic” digital trade agreement
On the Canadian tariff front, trade tensions over US trade agreements

AUSTRALIA OIL PAIN

Australia had its highest fuel supply in 15 years, but it is still below the International Energy Agency’s recommendations for 90 days. The latest government numbers from last week said Australia has 30 days of diesel, 30 days of jet fuel and 39 days of petrol.
Australian Prime Minister Anthony Albanese said the government would halve fuel and diesel taxes and remove heavy road user fees for three months to help families cope with rising costs caused by the Iran war, and would adopt a national fuel security policy to deliver fuel to regions where it is most needed.

The average price of a liter of diesel rose by more than A$3 ($2.06) in Australia last week and petrol to A$2.50, according to a March 29 report from the Australian Petroleum Institute. The tax cuts could reduce fuel costs by 26.3 Australian cents per litre, Albanese said.

The measures are the latest in a series of fuel security measures taken by Canberra since the war began on February 28. Click here for the story of how it previously announced the release of petrol and diesel from domestic sources and a temporary relaxation of fuel quality standards.

CUTTING ROADS IN SOUTH KOREA

South Korea is considering extending driving restrictions to the general public if global oil prices rise further and may consider cutting fuel taxes to ease the burden on households, Finance Minister Koo Yun-cheol said, as officials seek to curb energy demand.

The government may increase restrictions on the use of passenger vehicles by public bodies if the neutral prices rise to $120–$130 a barrel, from the current range of $100–$110.

If extended to the entire nation, the policy would mark the first nationwide driving restrictions since the 1991 Gulf War, when the government imposed a 10-day driving cycle to conserve energy.

In Indonesia, the country’s leader visited Tokyo this week to address shortages caused by conflicts in the Middle East, the region’s main source of energy supply. Indonesia is also expected to announce curbs in the coming days.

It comes a week after the Philippines became the first country to declare a national power emergency, while Sri Lanka reduced its work week to four days and fuel shortages, and Myanmar cut back on truck drivers to change days.

HOME WORK

In Nigeria, pump prices have risen by 65%, more than elsewhere in the region, where government price controls have limited the rise. Inflation had also started to moderate after peaking last year, but since the start of the war, the cost of transport and other food has doubled.

Businesses and unions have asked the government for emergency aid, including tax incentives for refiners, negative naira-based supply and temporary measures, while accelerating long-term energy transitions.

Meanwhile, Ethio Engineering Group has asked its more than 3,000 workers to switch to virtual meetings to reduce fuel consumption in line with government guidelines to prevent a full-scale power crisis.
Like other countries in the region, Ethiopia is facing fuel supply disruptions. The government in Addis Ababa responded by increasing fuel subsidies and imposing energy conservation measures.

Read on to learn more about how the war is affecting workers. We also have a special report released today from our colleagues at the Thomson Reuters Foundation on the deployment of artificial intelligence and governance in today’s ESG Lens.

ADD TO SURGERY

  • Killed in the line of duty: At least 10 medics, three journalists and UN peacekeepers were killed over the weekend in an Israeli airstrike in southern Lebanon in the fighting between Israel and the Lebanese armed group Hezbollah, which broke out on March 2. This follows Israeli tank fire that injured Ghanaian soldiers at a UN peacekeeping station in southern Lebanon earlier this month.
  • Working in war: Migrant workers face serious risks as conflicts escalate across the Middle East and companies can no longer pretend they are unaware of the dangers their workers face, writes Catriona Fraser, immigrant rights researcher for the Center for Business and Human Rights for Ethical Corp Magazine. Click hereopens a new tab for a full review.
  • Flying in war: Pilots face increasing risks from missiles and drones as more wars crowd air corridors, Europe’s top aviation safety official told Reuters. The growing conflict in the Middle East, the protracted Russia-Ukraine conflict and the conflict between Pakistan and Afghanistan, have forced airlines to enter difficult corridors, especially in Azerbaijan and Central Asia. Click here for the full Reuters report.
  • Health care in Cuba: The President of the United States, Donald Trump, reversed the ban on the export of oil to Cuba when a Russian ship carrying 100,000 tons of crude oil arrived on the Caribbean island, providing much-needed relief. Click here for an emotional story of how health workers have been bearing the brunt of burnout amidst power outages, water cuts at home and difficult working conditions.

ESG LESE

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Click hereopens a new tab to view a recent report by the Thomson Reuters Foundation’s AI Company Data Initiative that focuses on governance issues in AI.

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