One of the most alarming aspects of the current global energy crisis is the speed with which it developed, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra, the IEA chief noted that global oil markets were actually in surplus at the start of 2026 — yet within weeks of the Iran conflict erupting, that surplus had been entirely consumed and replaced by dangerous shortfalls. The lesson, he said, was that the world remains deeply vulnerable to rapid geopolitical shocks.
The crisis began with US and Israeli strikes on Iran on February 28 and quickly escalated following the closure of the Strait of Hormuz to commercial shipping. Oil losses from the conflict reached 11 million barrels per day and gas losses totaled 140 billion cubic metres, compared to 5 million barrels daily during the 1970s crises and 75 billion cubic metres during the Ukraine conflict. Birol described the total impact as equivalent to two oil crises and one gas crisis combined.
The IEA acted on March 11 with a record release of 400 million barrels from strategic petroleum reserves, and Birol called on governments to implement demand-cutting measures including remote work policies, lower speed limits, and reduced commercial aviation. He confirmed discussions were underway about further reserve releases, stressing that only 20 percent of available stocks had been used. He was candid that these measures could ease the crisis but not resolve it.
The Strait of Hormuz, through which about 20 percent of the world’s oil passes, remains closed to commercial traffic, hitting Asia-Pacific nations especially hard. At least 40 Gulf energy assets have been severely damaged, meaning even a ceasefire would not produce an immediate supply recovery. European markets have also seen tightening supplies of diesel and jet fuel, while Canada and Mexico’s increased output offers some partial relief.
Trump’s ultimatum to Iran to reopen the strait within 48 hours expired without resolution, and Tehran threatened retaliatory strikes on US and allied energy and water infrastructure. Birol urged governments to resist fuel hoarding and to coordinate internationally. He said that only by working together could the world avoid the worst economic consequences of a crisis that was, in historical terms, genuinely without precedent.