The chief of the International Energy Agency has called on governments worldwide to take immediate demand-side action, including lowering highway speed limits and expanding remote work, to counter the devastating effects of the Iran war on global energy supply. Fatih Birol said the crisis has become equivalent to the combined force of the 1970s oil shocks and the gas disruption caused by Russia’s invasion of Ukraine. The measures he is recommending mirror those used during past energy emergencies but are being applied to an unprecedented scale of disruption.
Birol made his comments while visiting Australia, where he met with Prime Minister Anthony Albanese and addressed journalists at the National Press Club in Canberra. He said that when US and Israeli strikes on Iran began on February 28, many world leaders did not initially grasp the scale of what was unfolding. That delayed recognition prompted the IEA to take emergency action and push for both supply-side and demand-side interventions.
The statistics are stark. The conflict has caused the loss of 11 million barrels of oil per day and 140 billion cubic metres of natural gas. The 1970s oil crises combined removed roughly 5 million barrels daily, and the Ukraine conflict cost markets 75 billion cubic metres of gas — making the Iran crisis more than double in severity on both fronts.
The IEA authorized the release of 400 million barrels from strategic petroleum reserves, by far the largest emergency mobilization in the organization’s history. Birol acknowledged this was only 20 percent of total available stocks and signaled that additional releases could follow if conditions deteriorate. He was careful to note, however, that reserve releases can ease market pressure but cannot fix the underlying supply problem.
The closure of the Strait of Hormuz has worsened shortages of diesel and jet fuel in Europe and cut oil flows to Asia dramatically. US President Trump threatened Iran with further strikes on its energy infrastructure if the strait was not reopened within 48 hours, while Iran responded with threats of its own against allied energy facilities. Birol urged all parties to prioritize reopening the strait, calling it the only path to meaningful relief for the global economy.