IEA Warns of Severe Energy Crisis as War Cuts 11 Million bpd Supply

The world may be heading toward its most severe energy crisis in decades as ongoing conflict in West Asia disrupts global oil supplies, International Energy Agency Executive Director Fatih Birol said while speaking at the National Press Club in Canberra.

Birol described the situation as 'very severe,' noting that the scale of supply disruption has already surpassed the oil shocks of the 1970s.“Many of us remember the two consecutive oil crises in the 1970s, when the world lost about five million barrels per day in each crisis. Together, that amounted to 10 million barrels per day,” he said. “As of today, we have lost 11 million barrels per day, more than the two major oil shocks combined," he added.

The IEA Chief said that the agency is actively consulting with governments across Asia and Europe regarding a potential release of additional oil from strategic reserves if market conditions worsen.

Earlier this month, IEA member countries agreed to release a record 400 million barrels of oil from stockpiles to stabilise global crude prices. However, Birol clarified that there is no fixed price threshold that would automatically trigger further releases.

He stressed that reopening key supply routes, particularly the Strait of Hormuz, remains critical to easing market tensions. “The single most important solution to this problem is opening the Hormuz Strait,” he said.

Birol also warned that the current crisis could exceed the combined impact of past oil shocks and the energy market disruptions caused by the Russia-Ukraine conflict, underscoring the growing risks to global energy security.