World in energy crisis worse than 1970s’ oil shocks combined, IEA head says

Energy crunch prompted by Iran war poses ‘major threat’ to global economy, Fatih Birol says.

The world is facing a worse energy crisis than the twin oil shocks of the 1970s and the fallout of the Ukraine war combined, the head of the International Energy Agency (IEA) has warned.

Speaking at a media event in Australia on Monday, IEA Executive Director Fatih Birol said the energy crunch prompted by the US-Israel war on Iran exceeded the 1973 and 1979 oil shocks and gas shortages stemming from Russia’s 2022 invasion of Ukraine put together.

“This crisis, as things stand, is now two oil crises and one gas crash put all together,” Birol said in remarks to the National Press Club of Australia in Canberra.

Birol said the effective closure of the Strait of Hormuz and attacks on energy facilities had reduced global oil supplies by about 11 million barrels per day (bpd), more than double the combined shortfalls of the 1970s’ crises.

He said liquefied natural gas (LNG) supplies had been reduced by about 140 billion cubic metres, compared with a shortfall of 75bcm in the aftermath of Ukraine’s invasion by Russia.