A prolonged closure of the Strait of Hormuz could cause lasting and irreversible damage to the global economy, the head of the International Energy Agency has warned. Fatih Birol, speaking in Canberra, said the energy crisis caused by the Iran war was already equivalent to the combined impact of the 1970s twin oil shocks and the Ukraine gas emergency. Continued disruption to Hormuz, he said, would compound the damage in ways that would be difficult to undo for years.
The strait currently carries approximately 20 percent of global oil supply and has been closed to commercial shipping following attacks on vessels. The closure, combined with damage to at least 40 Gulf energy facilities, has removed 11 million barrels of oil per day and 140 billion cubic metres of gas from international markets. Birol said reopening the strait was the single most important step the world could take to begin stabilizing energy markets.
The IEA took extraordinary action on March 11, releasing 400 million barrels of oil from strategic reserves — the largest emergency deployment in its history. Birol confirmed that further releases were under consideration, with consultations ongoing among governments in Asia, Europe, and North America. He also called for demand-reduction measures including expanded remote working, lower motorway speed limits, and reduced commercial aviation.
The crisis has hit Asia-Pacific nations hardest, given the region’s heavy dependence on Gulf oil imports. Japan signaled potential participation in minesweeping operations if a ceasefire is reached, while Australia, Japan, and South Korea were criticized by President Trump for insufficient engagement. Birol met with Australian Prime Minister Anthony Albanese and stressed the need for regional nations to play a constructive role in the international response.
Iran threatened retaliatory strikes on US and allied energy and desalination infrastructure following Trump’s 48-hour ultimatum to reopen the strait. Birol warned that fuel hoarding by individual nations was making the situation worse globally. He was unequivocal that no country could protect itself from the consequences of a prolonged crisis through national action alone — and that international solidarity was the only viable response.
