The world was simply unprepared for the speed and scale of the energy crisis caused by the Iran war, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra, the IEA chief said even experienced energy market analysts underestimated how rapidly the situation would deteriorate following the start of US and Israeli strikes on Iran on February 28. He said the depth of the crisis — equivalent to the twin 1970s oil shocks and the Ukraine gas emergency combined — became clear only after irreplaceable time had been lost.
Birol explained that the world entered 2026 with an oil market surplus, providing a false sense of security. Within weeks of the conflict beginning, attacks on Gulf energy infrastructure and the closure of the Strait of Hormuz had converted that surplus into a dangerous shortage. At least 40 Gulf energy assets were severely damaged, and daily oil losses reached 11 million barrels — more than twice the combined losses of both 1970s crises.
Gas losses from the conflict also topped 140 billion cubic metres, exceeding the 75 billion cubic metres removed by the Ukraine war. Birol said the speed of the deterioration had required the IEA to act immediately and decisively. The agency released 400 million barrels from strategic reserves on March 11 — the largest emergency action in its history — while pushing governments to adopt energy-saving policies.
The Hormuz strait, carrying about 20 percent of global oil supply, remains closed to commercial traffic. Asia-Pacific nations have been most severely affected, while European fuel markets have tightened for diesel and jet fuel. Japan indicated potential willingness to participate in minesweeping operations if a ceasefire is achieved, and Birol said any such contribution would be valuable.
Iran threatened retaliatory strikes on US and allied energy and water infrastructure after Trump’s 48-hour deadline expired. Birol warned against complacency and called for sustained international engagement. He said the lesson of the crisis was clear: the world needed better early-warning systems for energy supply emergencies and faster, more coordinated mechanisms for responding when they occurred.