The Iran energy crisis has created a supply shock so large that no single economy — not even the largest in the world — can absorb it without significant economic damage on its own, the head of the International Energy Agency has warned. Fatih Birol, speaking in Canberra, said the combined loss of 11 million barrels of oil per day and 140 billion cubic metres of gas from world markets represented a supply disruption that required collective international management. He described the overall emergency as equivalent to the combined force of the 1970s twin oil shocks and the Ukraine gas disruption.
Birol said the United States, with the world’s largest economy and most diversified energy mix, was still being significantly affected by the crisis. The European Union, Japan, South Korea, China, and India — all major energy importers — were facing even more severe economic pressures. No nation had the reserves, the supply diversity, or the domestic production capacity to fully offset the effects of a supply disruption of this scale acting alone.
The conflict began February 28 with US and Israeli strikes on Iran. At least 40 Gulf energy assets have been severely damaged, and the Hormuz strait — through which approximately 20 percent of global oil flows — remains closed. The IEA deployed 400 million barrels from strategic reserves on March 11 — the largest emergency action in its history — with further releases under consideration.
Birol confirmed consultations with governments across Europe, Asia, and North America were ongoing and called for demand-side policies including remote work, lower speed limits, and reduced commercial aviation. He met with Australian Prime Minister Anthony Albanese and said the crisis demonstrated beyond any reasonable doubt that energy security was inherently a collective challenge requiring collective solutions.
Trump’s 48-hour ultimatum to Iran to reopen the strait expired without result, and Tehran threatened retaliatory strikes on US and allied energy and water infrastructure. Birol concluded by urging governments to resist the temptation of purely national energy strategies. He said the supply shock was too large for any nation to handle alone, and that genuine collective action was not just the best option — it was the only viable option.