Iran War Fuels Historic Energy Security Threat, IEA Warns

The ongoing conflict involving Iran is posing the most significant threat to global energy security in history, according to Fatih Birol, Executive Director of the International Energy Agency (IEA). The crisis, triggered by Iran’s effective blockade of the Strait of Hormuz – a critical waterway for global oil and gas transport – has already disrupted supply chains to a greater extent than the oil shocks of the 1970s.

Strait of Hormuz Blockade and Oil Supply Disruptions

Since Iran began restricting passage through the Strait of Hormuz three weeks ago, the situation has rapidly escalated. Approximately 20% of the world’s oil and gas passes through this vital chokepoint. Birol stated the blockade is “the greatest threat to global energy security in history,” as reported by EL PAÍS.

The IEA has responded by initiating the release of 400 million barrels from strategic reserves – the largest intervention in its history – but this measure has not stemmed the price increases. Oil prices have surged, closing the week just below $110 a barrel, a 50% increase since the conflict began.

Supply Losses Exceed Previous Crises

The current oil supply reduction has already reached 11 million barrels per day, surpassing the combined losses experienced during the 1973 and 1979 oil crises, which totaled 10 million barrels per day. Gas supply disruptions are even more severe, with losses in the Middle East reaching approximately 140 billion cubic meters – nearly double the amount lost after the start of the Ukraine war.

Broader Economic Impact and Government Responses

The surge in crude oil prices is translating into double-digit increases in gasoline and diesel prices in countries like Spain, prompting government intervention in the form of fuel tax cuts. The Strait of Hormuz is a critical artery for the global economy, carrying not only oil and gas but also essential commodities like fertilizers, sulfur, and helium.

Restarting Supply Will Take Time

Even if the conflict resolves and the Strait of Hormuz reopens, restoring oil and gas production will be a lengthy process. Birol estimates that it could take six months or longer to bring some fields back online.

IEA Response and Future Measures

The IEA has already released 20% of its total stockpiles (400 million barrels) from emergency reserves, and further supply discussions are underway with major producers including Canada, Mexico, Brazil, and Norway. However, these measures may not fully offset the loss of Middle Eastern output.

Political Underestimation of the Crisis

Birol has expressed concern that political decision-makers are underestimating the severity of the situation. He warned, “People understand that this is a major challenge, but I am not sure that the depth and the consequences of the situation are well understood.”