The Iran war is not merely damaging energy markets — it is threatening the entire architecture of global trade, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra, the IEA chief said the disruption to the Strait of Hormuz and Gulf supply chains was affecting not just oil and gas but also petrochemicals, fertilizers, sulfur, helium, and a range of other commodities essential to modern economies. He described the overall crisis as equivalent to the twin 1970s oil shocks and the Ukraine gas emergency simultaneously.
The Strait of Hormuz is not merely an oil transit route — it is one of the world’s most critical commercial shipping corridors. Its closure has disrupted supply chains across multiple sectors, affecting industries from agriculture to semiconductor manufacturing. Birol said the full economic consequences of the closure would take time to fully emerge and could be far-reaching and long-lasting if the situation was not resolved quickly.
The conflict began February 28 with US and Israeli strikes on Iran and has since caused daily oil losses of 11 million barrels and gas losses of 140 billion cubic metres. At least 40 Gulf energy assets have been severely damaged, making rapid supply restoration impossible. The IEA released 400 million barrels from strategic reserves on March 11 — the largest emergency deployment in its history — and called for demand-side measures including remote work, lower speed limits, and reduced flights.
The Asia-Pacific region has been most severely affected by the Hormuz closure, while European markets have also seen diesel and jet fuel tighten. Canada and Mexico’s increased production may offer partial relief to Europe, but the global supply gap remains enormous. Birol confirmed that further IEA reserve releases were under consideration and that consultations with governments across three continents were ongoing.
Iran threatened retaliatory strikes on US and allied energy and desalination infrastructure after Trump’s 48-hour deadline expired. Birol urged governments to avoid domestic fuel hoarding and to treat the crisis as the global emergency it truly was. He concluded that only through restoring safe passage through Hormuz and coordinating international responses could the world begin to repair the damage done to global trade and economic stability.