The global energy outlook is the most concerning it has been since the Arab oil embargo of 1973, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra during a tour of the Asia-Pacific region, the IEA chief said the Iran war had created an energy emergency that in scale and severity surpassed the crisis of half a century ago. He described the current situation as equivalent to the twin 1970s oil shocks and the Ukraine gas disruption combined — a convergence of crises with no historical parallel.
Birol explained that the 1973 oil embargo triggered a global economic recession that reshaped energy policy for a generation. The current crisis, he said, had the potential to be even more damaging given its broader scope. Daily oil losses from the Iran conflict have reached 11 million barrels, more than double the combined losses of both 1970s oil crises, while gas losses of 140 billion cubic metres exceed the Ukraine conflict’s impact.
The IEA responded on March 11 with the largest emergency reserve release in its history — 400 million barrels of oil from member nations’ strategic stocks. Birol said further releases were under consideration and that only 20 percent of available stocks had been deployed. He also called for demand-side measures including expanded remote working, lower speed limits, and reduced commercial aviation.
The Strait of Hormuz, through which about 20 percent of global oil supply passes, remains closed to commercial shipping after attacks on vessels. At least 40 Gulf energy assets have been severely damaged, making supply recovery a long-term challenge. The Asia-Pacific region has been hardest hit, while European fuel markets have also tightened significantly.
Iran threatened retaliatory strikes on US and allied energy and water infrastructure after Trump’s 48-hour ultimatum to reopen the strait expired. Birol met with Australian Prime Minister Anthony Albanese and called for the strongest possible international response. He concluded that the world must learn from the 1973 crisis and respond with the same determination and urgency that transformed global energy policy after that watershed moment.