Fatih Birol, the head of the International Energy Agency, has said 2026 has already become the most consequential year for global energy security in decades, following the eruption of the Iran war and its devastating impact on world energy markets. Speaking in Canberra, the IEA chief described the current crisis as the equivalent of the 1970s twin oil shocks and the Ukraine gas disruption all at once. He said the depth of the emergency required an equally unprecedented global response.
The conflict started on February 28 with US and Israeli strikes on Iran and rapidly escalated into a broader regional war. The closure of the Strait of Hormuz — through which about 20 percent of world oil flows — created immediate supply shortfalls across Asia, Europe, and beyond. At least 40 Gulf energy assets have been severely damaged, and Birol warned that even a ceasefire would not produce an immediate restoration of supply.
The IEA responded with the largest reserve release in its history — 400 million barrels of oil on March 11 — and called for demand-reducing policies including remote work, lower speed limits, and reduced air travel. Birol confirmed discussions were ongoing about whether a second reserve release would be necessary, noting that only 20 percent of available stocks had been deployed in the initial action. He said the reserve release was a necessary measure to reduce economic pain but could not substitute for lost supply.
The crisis has removed 11 million barrels of oil per day and 140 billion cubic metres of gas from world markets — far exceeding the losses of the 1973 and 1979 oil crises combined, and also surpassing the 75 billion cubic metres of gas lost during the Ukraine conflict. Birol also highlighted disruptions to petrochemicals, fertilizers, sulfur, and helium as compounding the economic consequences.
Iran threatened to strike US and allied energy and desalination infrastructure in response to Trump’s 48-hour ultimatum to reopen the strait. Birol met with Australian Prime Minister Anthony Albanese and called for the strongest possible international coordination. He said the crisis demanded that world leaders rise to the occasion with the same urgency the situation required — and that history would judge how effectively the global community responded.
