The global energy crisis sparked by the conflict involving Iran is now more severe than the oil shocks of the 1970s and the disruption following Russia’s invasion of Ukraine, according to the head of the International Energy Agency (IEA).
Fatih Birol, the IEA’s executive director, said the effective closure of the Strait of Hormuz — a route responsible for around a fifth of global oil and LNG flows — had removed 11 million barrels per day from the market.
Speaking at a conference in Sydney, he said: “Many of us remember the two consecutive oil crises in the 1970s … at that time, in each of the crises, the world lost about five million barrels per day — both of them together, ten million barrels per day.
"As of today, we have lost 11 million barrels per day — more than two major oil shocks put together.”
Birol described the situation as “very severe” and warned it could worsen due to disruption across “vital arteries of the global economy”, including petrochemicals, fertilisers and helium supply chains.
He added: “No country will be immune to the effects of this crisis if it continues to go in this direction. So there is a need for global efforts,” and said he “very much hopes” the situation “is resolved as soon as possible”.
The IEA has already coordinated the release of 400 million barrels of oil from strategic reserves, although Birol cautioned: “A stock release will help to comfort the markets, but this is not the solution. It will only help to reduce the pain in the economy. The single most important solution to this problem is opening the Hormuz Strait.”
He also warned: “The depth of the problem was not well appreciated by the decision-makers around the world.”
The disruption is also hitting global supply chains beyond energy, with fertiliser trade, helium exports and sulphur markets all under pressure — raising concerns over inflation and industrial impacts.