IEA Warns of Severe Global Energy Crisis

The International Energy Agency (IEA) has warned that the global energy crisis caused by the war in Iran is worse than the combined oil shocks of the 1970s and the fallout from Russia's invasion of Ukraine. The conflict has removed about 11 million barrels of oil per day and 140 billion cubic meters of natural gas from global markets, according to multiple reports.

The closure of the Strait of Hormuz, through which about 20% of the world’s oil supply is transported, has sparked shortages and growing anxieties worldwide. IEA Executive Director Fatih Birol stated that at least 40 energy assets in the Gulf region had been severely damaged. The damage to oil and gas fields, refineries, and pipelines will take time to repair, according to The Guardian.

In response to the crisis, Birol oversaw the release of 400 million barrels of oil from strategic reserves, the largest emergency measure in IEA's history. He also proposed demand-side measures such as increasing remote working, lowering speed limits on highways, and reducing air travel to mitigate the impact.

The crisis has led to a surge in oil prices by over 50% since the start of the war. According to Reuters, Birol is consulting with governments in Asia and Europe on releasing more stockpiled oil if necessary. U.S. President Donald Trump issued Iran a 48-hour ultimatum to reopen the Strait of Hormuz or face destruction of its energy infrastructure.