IEA chief warns energy crisis worse than 1970s oil shocks

2026-03-23 - 09:10

Fatih Birol, the International Energy Agency’s executive director, has said the energy crisis is “very severe” and that the global economy is “facing a major, major threat.” The situation, he said, is worse than the two consecutive oil crises in 1973 and 1979, in which the world lost about 10 million barrels of oil per day, and the gas market crash following Russia’s invasion of Ukraine. “And not only oil and gas, some of the vital arteries of the global economy, such as petrochemical, such as fertilizers, such as sulfur, such as helium, their trade is all interrupted, which would have serious consequences for the global economy,” Birol said at the National Press Club of Australia on Monday. Asia, he said, is at the forefront of the crisis due to its reliance on the Strait of Hormuz, the vital waterway which Iran has effectively closed. “The single most important solution to this problem is opening up the Hormuz trade.” The IEA chief said they were talking with countries including Canada and Mexico to increase oil production and release into the global market. “We have stocks and we are incentivizing many countries with refineries to move faster than they normally do,” Birol said. Iranian missile strikes have knocked out Qatar’s liquefied natural gas (LNG) exports, and while Australia could fill the gap, it cannot do it alone, he said. “Australia alone will not be able to offset the entire lack of LNG coming from Middle East, but there will be some new LNG facilities coming to the market in from Australia and elsewhere,” Birol said. Following the IEA’s historic release of 400 million barrels of oil to ease the markets, Birol said the organization was consulting with governments around the world and more oil could be released if necessary. “If needed, we can put more oil in the markets, both crude oil and products,” he said. “Our stock release will help to comfort the markets, but this is not the solution. It will only help to reduce the pain and the economy.” At least 44 energy assets in the region have been severely or very severely damaged across nine countries, Birol said. Rationing and Covid-style measures to conserve energy may be needed for some time, with poorer nations suffering the most.