The Iran war has brutally exposed just how fragile global energy supply chains really are, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra, the IEA chief said the rapid transformation of an oil market surplus into a severe shortage within weeks of the conflict starting demonstrated how vulnerable the world remains to geopolitical disruptions. He described the resulting energy crisis as the equivalent of the 1970s twin oil shocks and the Ukraine gas crisis happening simultaneously.
The conflict began with US and Israeli strikes on Iran on February 28 and quickly escalated into a full-scale regional war. The closure of the Strait of Hormuz removed approximately 20 percent of global oil supply from international markets, while strikes on Gulf energy infrastructure damaged at least 40 major facilities severely. The combination has produced oil losses of 11 million barrels per day and gas losses of 140 billion cubic metres — figures that exceed every previous energy crisis on record.
The IEA mobilized 400 million barrels from strategic petroleum reserves on March 11, the most significant emergency action in the agency’s history. Birol also called on governments to reduce energy demand through policies including expanding remote working, lowering highway speed limits, and cutting commercial aviation. He said these steps were essential to buy time while diplomatic and security solutions were pursued.
The disruption has extended beyond oil and gas to threaten supplies of petrochemicals, fertilizers, sulfur, and helium — commodities that underpin food production and industrial activity worldwide. Birol warned that some Asian nations were hoarding fuel domestically, a trend that threatened to worsen global supply dynamics. He said increased Canadian and Mexican oil production could help European markets but would not fully compensate for the losses from the Gulf.
Iran responded to Trump’s 48-hour ultimatum to reopen the Hormuz strait by threatening retaliatory strikes on US and allied energy and desalination facilities. Birol held talks with Australian Prime Minister Anthony Albanese and urged governments across all continents to coordinate rather than compete. He said the crisis was a powerful reminder that energy security must be treated as a global public good — not a national advantage.
