The catastrophic energy disruptions triggered by the Iran war demonstrate the urgent need for countries to build far greater resilience into their energy systems, according to the head of the International Energy Agency. Fatih Birol, speaking in Canberra during a tour of the Asia-Pacific region, said the crisis had exposed just how vulnerable global energy supply chains are to geopolitical shocks. He described the current disruption as equivalent to the combined force of the 1970s oil shocks and the Ukraine gas crisis.
Birol explained that the world began 2026 with a surplus in global oil markets, yet within weeks of the conflict beginning on February 28, that surplus had transformed into a dangerous shortage. The loss of 11 million barrels of oil per day and 140 billion cubic metres of natural gas has shaken energy markets across every continent. At least 40 Gulf energy facilities have been severely damaged, making a rapid return to pre-crisis supply levels impossible.
The IEA’s emergency response included a record release of 400 million barrels from strategic reserves and recommendations for demand-cutting measures including remote working, speed limit reductions, and fewer flights. Birol confirmed the IEA was in discussions about further reserve deployments, noting that the initial release represented just 20 percent of available stocks. He stressed the measures could ease the crisis but could not solve it.
The Strait of Hormuz, carrying approximately 20 percent of global oil supply, has been closed by attacks on commercial shipping, producing immediate fuel shortages across Asia and Europe. The crisis has also disrupted supplies of petrochemicals, fertilizers, sulfur, and helium — commodities whose availability is essential to agriculture and industrial production globally. Birol said the disruption extended well beyond the energy sector in its potential economic consequences.
Japan indicated it could support minesweeping efforts if a ceasefire is reached, while Iran threatened retaliation against US and allied energy infrastructure following Trump’s 48-hour ultimatum. Birol met with Australian Prime Minister Anthony Albanese and called for collective international action. He said the crisis should serve as a permanent reminder of the need to diversify energy sources, improve strategic stockpile management, and reduce dependence on single supply corridors.