Fatih Birol, the executive director of the International Energy Agency, has declared that the global energy system is currently undergoing its most severe stress test in modern history, driven by the catastrophic consequences of the Iran war. Speaking in Canberra during a diplomatic visit to Australia, Birol said the combined oil and gas losses from the conflict exceed those of the twin 1970s oil shocks and the Ukraine gas crisis put together. He warned that the energy system’s ability to absorb further shocks was being stretched to its absolute limits.
The war began February 28 with US and Israeli strikes on Iranian targets and rapidly escalated into a full regional conflict. The closure of the Strait of Hormuz to commercial shipping cut off approximately 20 percent of global oil supply, while strikes on Gulf energy infrastructure severely damaged at least 40 major facilities. Daily oil losses have reached 11 million barrels, and gas losses stand at 140 billion cubic metres — figures that dwarf every comparable crisis in recorded history.
The IEA responded on March 11 with the largest emergency reserve release in its history, deploying 400 million barrels of oil from member nations’ strategic stocks. Birol confirmed that this initial deployment represented just 20 percent of available reserves and that further releases were under active consideration. He also called on governments to adopt demand-reduction policies including expanded remote working, lower motorway speed limits, and cuts to commercial aviation.
The crisis has reverberated across multiple sectors, disrupting not only oil and gas but also petrochemicals, fertilizers, sulfur, and helium. These disruptions carry significant consequences for agriculture and manufacturing industries around the world. Birol warned that the Asia-Pacific region had been particularly hard hit by the Hormuz closure, given the region’s heavy dependence on Gulf oil imports.
Iran threatened retaliatory strikes on US and allied energy and desalination infrastructure after Trump’s 48-hour ultimatum to reopen the strait expired. Birol met with Australian Prime Minister Anthony Albanese and urged all nations to contribute to a coordinated global response. His central warning was that the global energy system cannot absorb continued shocks of this magnitude without severe and lasting economic consequences for every nation on earth.
