April 25: Impact of Iran-Israel Conflict on Global Economy, Markets, and Livelihoods

The oil crisis triggered by the Iranian conflict has permanently altered the fossil fuel industry, prompting countries to shift away from fossil fuels to ensure energy security. LNG supply shortages caused by infrastructure damage may persist until late 2027. IEA Executive Director Fatih Birol stated that a key impact is the loss of trust in fossil fuels, leading to decreased demand. He believes governments will push for renewables and nuclear power, weakening oil's main markets. LNG supply has decreased by nearly 20%, and while new projects elsewhere may eventually compensate, tightness will last through next year. In South Korea, diesel prices hit a near 4-year high, exceeding 2,000 won per liter, leading to the implementation of price caps. In Japan, the soaring fuel costs are the 'last straw' for traditional public baths (sento), with century-old family businesses in Aichi and Aomori forced to close or shorten hours due to unstable supply and maintenance burdens.