The International Energy Agency (IEA) has issued a stark warning, stating that the global economy faces a “major threat” from the ongoing energy crisis triggered by the conflict in the Middle East. IEA chief Fatih Birol emphasized that no country will be spared from the economic fallout if the crisis persists.
Speaking at the National Press Club in Canberra, Australia, Birol compared the current energy turmoil to the crises of the 1970s and the repercussions of Russia’s invasion of Ukraine in 2022. “This crisis is now a combination of two oil shocks and a gas collapse,” he said.
Birol warned, “The global economy is under severe threat today, and I sincerely hope this issue will be resolved swiftly. If it continues on this trajectory, every nation will be affected. That’s why there is an urgent need for coordinated global efforts.”
Highlighting the scale of the crisis, Birol noted, “In the 1970s, the world lost about five million barrels per day during each of the two oil crises—that’s a total of 10 million barrels per day. Today, we have lost 11 million barrels per day, more than the combined impact of those two major shocks.”
Damaged Energy Infrastructure in the Middle East
Birol also revealed that at least forty energy assets across nine countries in the Middle East have been “severely or very severely” damaged amid ongoing regional conflict.
The escalation of violence has led to heightened tensions, with US President Donald Trump and Tehran exchanging threats as the conflict enters its fourth week. The US has demanded Iran reopen the Strait of Hormuz, a vital waterway through which approximately 20% of the world’s oil and gas shipments pass. The blockage has nearly halted all petroleum shipments through the narrow strait.
Oil prices responded to the developments, with US benchmark crude briefly surpassing $100 per barrel early Monday, signaling heightened market anxiety and potential economic repercussions worldwide.
