Iran war energy crisis equal to 70s twin oil shocks and fallout from Ukraine war, says IEA chief | US-Israel war on Iran
The global energy crisis caused by the war in Iran is equivalent to the combined effects of the double oil shock of the 1970s and Russia’s invasion of Ukraine, the head of the International Energy Agency has warned.
Fatih Birol, the IEA’s director general, said the growing fallout could be severely exacerbated by disruptions in “vital arteries of the global economy” including petrochemicals, fertilisers, sulfur and helium.
Speaking at the Australian National Press Club in Canberra on Monday, Birol said that the depth of the problems created in the energy markets by the US and Israeli bombings on Iran and the closure of the strategic Strait of Hormuz were not fully understood by world leaders at the beginning.
This led to the IEA’s intervention last week as it pressed for demand-side measures such as increasing the number of employees working from home, temporarily lowering speed limits on motorways and reducing air travel.
He warned that at least 40 energy assets in the Gulf region had suffered serious or very serious damage, so even an end to the conflict would not immediately restore energy supplies.
Birol said that approximately 5 million barrels of oil were lost every day during the two crises in 1973 and 1979. Russia’s invasion of Ukraine in 2022 caused the withdrawal of approximately 75 billion cubic meters (bcm) of natural gas from international markets.
However, the current crisis, which started with the bombings against the regime in Tehran on February 28, was already causing a loss of 11 million barrels of oil and approximately 140 billion cubic meters of gas per day.
“This crisis, in its current form, is a combination of two oil crises and a gas crisis,” Birol told reporters ahead of his meeting with Australian Prime Minister Anthony Albanese.
On March 11, Birol directed the release of 400 million barrels of oil from strategic reserves, the largest emergency measure in its history.
There was a glut in global oil markets at the beginning of 2026, but strikes on ships in the Strait of Hormuz, where approximately 20 percent of the world’s oil supply is transported, led to worldwide shortages and growing concerns.
US President Donald Trump gave Iran 48 hours over the weekend to reopen the strait to ships and warned that if it did not act, Tehran faced the destruction of its energy infrastructure. This period will end late Monday night.
Birol said that the Asia Pacific region was negatively affected by the closure. Birol said, “The most important solution to this problem is the opening of the Strait of Hormuz.”
In response to Trump’s threat, the Iranian military said it would target energy and desalination infrastructure “belonging to the United States and the regime in the region.”
Trump criticized NATO members, as well as Australia, Japan and South Korea, for not helping the strait. On Sunday, Japan said it might consider deploying its military for minesweeping if a ceasefire was reached.
Birol stated that he consulted world leaders in Asia, Europe and North America about another possible release of emergency oil supplies, noting that the first move was only 20% of total stocks.
“We can release more oil, both crude oil and products, if necessary,” he said. “Our stock release will help ease the markets, but it’s not the solution. It will just have to ease the pain on the economy.”
He declined to say what might trigger more evacuations. “We will look at the conditions. We will analyze the markets under consideration and discuss with our member countries.”
When asked whether countries taking defensive positions on their own fuel stocks is worrying for the world economy, Birol said that such moves are a problem in Asian countries. Changes in diesel and jet fuel supplies were being felt in Europe, but increased oil production in Canada and Mexico would help.
“I think no country will be immune from the effects of this crisis if it continues to move in this direction, so global efforts are needed,” he said.
