Global Economy Faces Unprecedented Threat as IEA Warns of Combined Oil and Gas Crisis

Fatih Birol warns the current energy crisis is worse than the 1970s oil shocks combined. Learn why no country is immune as Hormuz remains blocked.

By: AXL Media

Published: Mar 23, 2026, 4:01 AM EDT

Source: Information for this report was sourced from AFP

Unprecedented Convergence of Global Energy Shocks

The current paralysis of energy markets has created a "triple threat" that surpasses any single historical disruption, according to International Energy Agency (IEA) chief Fatih Birol. Speaking at the National Press Club in Australia on Monday, Birol articulated that the world is simultaneously enduring the equivalent of two 1970s-style oil crises and a major natural gas collapse. This compounding effect, triggered by the ongoing U.S.-Israel war against Iran, has removed approximately 11 million barrels of oil per day from global circulation, more than double the daily shortfalls seen during the landmark 1973 and 1979 shocks.

Extensive Infrastructure Damage Across Nine Nations

The physical toll of the conflict on energy production has been catastrophic, with IEA assessments revealing that at least 40 energy assets have sustained "severe or very severe" damage. These facilities, ranging from oil fields and refineries to critical pipelines and gas processing plants, are spread across nine different countries in the Middle East. Birol noted that the scale of this destruction means that even an immediate cessation of hostilities would not lead to a swift recovery of supply, as the technical challenges of restoring these "vital arteries of the global economy" will take significant time and specialized resources.

Hormuz Blockade Strangles Global Supply Chains

The effective closure of the Strait of Hormuz remains the single most significant driver of the current economic instability. Birol emphasized that roughly 20 percent of the world's oil and liquefied natural gas (LNG) shipments normally transit through this narrow chokepoint, which has been severely disrupted since early March. The IEA chief stated that the "single most important solution" to the crisis is the reopening of the waterway, as the current bottleneck has not only spiked prices but also sparked critical fuel shortages in Asia and rising costs for diesel and jet fuel in Europe.