Iran War Energy Crisis Compared to 1970s Oil Shocks, Says IEA Chief

Fatih Birol, the head of the International Energy Agency has warned that the energy crisis driven by the Iran conflict rivals the combined scale of the 1970s oil shocks and the disruption caused by Russia’s war in Ukraine, citing major supply losses and market instability.

Speaking at the National Press Club of Australia in Canberra, Fatih Birol said the war in Iran, combined with bombings and disruptions in the region, has significantly affected global energy systems, particularly through interruptions to critical supply routes such as the Strait of Hormuz.

Birol noted that key components of the global economy—including petrochemicals, fertilizers, sulfur, and helium—are being impacted by disruptions in energy transport and production.

Birol compared the current situation to past global energy disruptions, stating that the 1970s oil shocks removed around 5 million barrels of oil per day from markets, while Russia’s 2022 invasion of Ukraine eliminated significant volumes of natural gas supply.

In contrast, he said the current crisis has already resulted in the loss of approximately 11 million barrels of oil per day and about 140 billion cubic meters of gas, describing it as “two oil crises and one gas crisis put together.”

Reuters reported that Birol emphasized the scale of disruption was not initially fully recognized by global leaders when the conflict escalated.

According to Birol, at least 40 energy assets across the Gulf region have been severely or very severely damaged. He warned that even if the conflict ends, restoring supply chains and infrastructure would take considerable time.

The destruction of infrastructure has been compounded by continued instability in maritime transport, with repeated incidents affecting shipping lanes and energy exports.

The closure and disruption of shipping through the Strait of Hormuz has had major implications for global energy markets. Roughly 20% of the world’s oil supply passes through the waterway, making it one of the most critical chokepoints in global trade.

Birol said the Asia-Pacific region has been particularly affected, and stressed that reopening the strait remains the most important step toward stabilizing markets.

In response to the crisis, the IEA coordinated the release of 400 million barrels of oil from strategic reserves, marking one of the largest emergency interventions in its history. Reuters reported that this release represented about 20% of total stockpiles.

Birol said additional releases remain possible depending on market conditions, but emphasized that such measures would only ease short-term pressure rather than resolve the underlying crisis.

The escalation has prompted warnings from world leaders and energy officials about prolonged economic consequences. Rising fuel costs, supply shortages, and market volatility have already begun affecting multiple regions, including Asia and Europe.

Birol stressed that no country would remain immune if disruptions continue, calling for coordinated global efforts to stabilize energy supplies and mitigate economic fallout.

The crisis has also intensified geopolitical tensions, with the United States issuing demands for the reopening of the Strait of Hormuz. According to Reuters, U.S. President Donald Trump warned of potential strikes on Iran’s energy infrastructure if the situation is not resolved within a set deadline.

In response, Iran has signaled it may target energy and desalination infrastructure belonging to adversaries in the region, further raising concerns over escalation.

Birol concluded that while temporary measures can reduce immediate economic pain, long-term stability will depend on diplomatic and coordinated international action to restore energy flows and prevent further disruption.,