IEA: Disruptions Equivalent to Major Oil Crises

IEA Warns of Major Economic Fallout from Middle East Energy Disruptions​

Iran War Damages Over 40 Energy Assets Across Nine Countries​

Canberra, March 23 – The International Energy Agency (IEA) Executive Director Fatih Birol has warned that the Iran war is causing severe and widespread damage to energy assets across West Asia, with no country immune to the resulting disruption in oil and gas supplies.

According to Birol, over 40 energy assets are “severely or very severely” damaged in nine countries within the region.

Economic Impact Comparable to Past Crises​

Birol stated that the current disruptions are equivalent to the combined impact of the two major oil crises of the 1970s and the 2022 natural gas crisis following Russia’s invasion of Ukraine. He explained that the 1970s crises resulted in a combined loss of approximately 10 million barrels per day. The current situation has already led to a loss of roughly 11 million barrels per day.

Beyond Oil and Gas: Global Economic Consequences​

The IEA has also highlighted the broader economic ramifications of the crisis. Birol noted that the disruption extends beyond oil and gas to impact vital arteries of the global economy, including petrochemicals, fertilizers, sulphur, and helium. He emphasized that these interruptions will have serious consequences for the global economy.

IEA Releases Emergency Oil Reserves​

In early March, the IEA announced it would release a record 400 million barrels from its emergency oil reserves to mitigate supply shocks and address rising prices.

Discussions Underway for Additional Releases​

Birol indicated that the IEA is currently engaged in discussions with governments in Asia and Europe regarding the potential release of additional oil reserves if needed.

Strait of Hormuz Remains Key to Solution​

He stressed that the only true solution to fuel supply disruptions is the reopening of the Strait of Hormuz, where shipping has nearly come to a standstill due to the ongoing conflict.

Global Economy Faces ‘Major Threat’​

Birol concluded by warning that the global economy faces a “major threat” if the crisis continues to escalate.