More than 115 countries have adopted policy measures including energy conservation, price supports, and structural changes to adapt to the energy impact of the Iran war and the closure of the Strait of Hormuz, according to Jérôme Bilodeau, head of analysis for the International Energy Agency’s Office of Energy Efficiency and Inclusive Transitions. Nations worldwide are scrambling to blunt the economic blow of restricted shipping through the vital Middle Eastern chokepoint, deploying everything from remote-work incentives to targeted fuel subsidies.
Global Energy Conservation and Demand-Side Policies
Demand-side measures cannot fully replace the sheer volume of energy transiting through the Strait of Hormuz, but they successfully dampen and moderate the overall impact, according to Bilodeau. Speaking during a webinar hosted by the Center for Strategic and International Studies on Aug. 4, Bilodeau noted that 58 governments have enacted specific energy conservation initiatives since the war began.
These conservation efforts focus heavily on curbing oil consumption. Governments are actively encouraging citizens to reduce private transportation fuel use, adopt work-from-home or study-from-home schedules, cut back on official government travel, and adjust cooling temperature set points in public buildings, according to the International Energy Agency official.
Did you know?
Asia was the first region to implement policy changes in March, reacting like a wave or a tsunami that started in India and Southeast Asia before spreading globally, according to Bilodeau.
Price Supports and Financial Interventions
Beyond conservation, 94 governments have introduced direct financial cushions such as price caps, fuel subsidies, and targeted tax measures, Bilodeau said. Countries with robust fiscal space have moved aggressively to protect domestic consumers from volatile crude markets.
Japan and South Korea introduced price caps and fuel subsidies precisely because they possess the economic means to do so, according to the International Energy Agency analysis. In addition to oil-focused policies, some nations have extended financial relief to other commodities. Japan established subsidies for electricity and natural gas, while India capped industrial gas usage, according to the IEA website.
Structural Shifts and Long-Term Reductions
Thirty governments have announced structural policies designed to permanently reduce fuel consumption through efficiency programs, electrification plans, and renewable incentives, Bilodeau said. These structural shifts signal a pivot away from short-term fixes toward permanent demand destruction.
National governments are using targeted tax policy and industrial incentives to accelerate this transition. Vietnam lowered its taxes on electric vehicles, while India pushed aggressive adoption of electric stoves, according to Bilodeau.
Market data reflects this structural pivot. In the first quarter of 2026, heat pump sales surged compared to the first quarter of 2025: up 22% in France, 34% in Germany, and 20% in Poland, according to a presentation discussed during the Center for Strategic and International Studies webinar. Electric car sales saw even steeper jumps over the same comparative period, rising 65% in India, 150% in South Korea, and 80% in Southeast Asia.
Pro Tip:
When analyzing shifting global oil metrics, cross-reference IEA policy trackers with S&P Global Energy CERA short-term outlooks to gauge how consumer-side mandates correlate with actual barrel-per-day demand drops.
World Liquids Demand Drops Amid Supply Constraints
Aggressive policy intervention and high prices have coincided with a sharp contraction in global oil consumption. World liquids demand dropped to 99.2 million barrels per day in May 2026, down significantly from 105.1 million barrels per day in May 2025, according to the S&P Global Energy CERA August Short-Term Outlook.
The downward trend persisted into the summer. Demand in July 2026 registered at 102.5 million barrels per day, compared to 107.3 million barrels per day in July 2025, the data shows. While natural gas measures like India’s industrial caps and Japan’s utility subsidies remain localized, the broad-based reduction in liquid fuel use highlights the sweeping efficacy of global demand dampening.
Frequently Asked Questions
Why have so many countries enacted energy policies recently?
More than 115 countries have adopted conservation, price support, and structural policies to counter the energy impacts of the Iran war and the closure of the Strait of Hormuz, according to the International Energy Agency.
Which countries were the first to implement energy restrictions?
Countries in Asia were the first to act, starting in March, with policies rolling out like a wave from India and Southeast Asia to the rest of the world, according to Jérôme Bilodeau of the IEA.
How much has global liquids demand dropped?
World liquids demand fell to 99.2 million barrels per day in May 2026 from 105.1 million barrels per day in May 2025, and stood at 102.5 million barrels per day in July 2026, down from 107.3 million barrels per day in July 2025, according to S&P Global Energy CERA data.
What specific structural changes are governments making?
Governments are enacting long-term efficiency programs, electrification plans, and renewable incentives, such as Vietnam lowering taxes on electric vehicles and India promoting electric stoves, according to IEA data.
What is your country doing to manage energy consumption during the Strait of Hormuz crisis? Share your thoughts or local observations in the comments below, and subscribe to our newsletter for ongoing updates on global commodity markets.