The global energy crisis triggered by the Iran war is far more complex than an oil and gas supply disruption — it is also threatening the availability of fertilizers, petrochemicals, sulfur, and helium, according to the head of the International Energy Agency. Fatih Birol warned in Canberra that these vital materials, essential to global food production and industry, are being affected by the conflict’s disruption to Gulf trade and production networks. His warning paints a picture of cascading economic consequences that extend far beyond the fuel pump.
Birol placed the scale of the oil and gas losses in historical context, comparing them to the combined 1970s oil shocks and the Ukraine gas crisis. The conflict, which began with US and Israeli strikes on Iran on February 28, has removed 11 million barrels of oil per day and 140 billion cubic metres of gas from international markets. At least 40 Gulf energy assets have suffered severe damage, making swift supply restoration unlikely even if the conflict ends soon.
The IEA responded with a record release of 400 million barrels from strategic petroleum reserves and pushed governments to adopt energy-saving policies including remote working, reduced highway speeds, and cuts to air travel. Birol confirmed that further reserve releases were under consideration and said the IEA was consulting with governments across three continents. He emphasized that while these steps would ease economic pain, they cannot replace the lost supply.
The Strait of Hormuz, through which about a fifth of world oil supply travels, remains closed to commercial shipping. The closure has hit Asia-Pacific nations hardest, though European markets for diesel and jet fuel have also tightened. Increased Canadian and Mexican oil output may provide some relief to Europe, but Asia faces a more significant supply gap.
Birol met Australian Prime Minister Anthony Albanese and praised Australia’s engagement in addressing the crisis. US President Trump issued a 48-hour ultimatum to Iran to reopen the strait, while Iran threatened retaliatory strikes on US and allied energy and desalination infrastructure. Birol’s bottom line was clear: a coordinated global response and the reopening of Hormuz are the only routes to genuine relief.