World faces worst energy crisis in decades, IEA chief warns

The International Energy Agency (IEA) Executive Director Fatih Birol warned on Monday that the ongoing conflict in the Middle East could lead to the worst energy crisis the world has seen in decades. He described the situation as "very severe" during a speech at the National Press Club in Canberra. Birol stated that the current crisis has already surpassed the scale of the oil shocks from the 1970s combined. He recalled, "Many of us remember the two consecutive oil crises in the 1970s... during those crises, the world lost about five million barrels per day, totaling 10 million barrels per day." He added, "As of today, we have lost 11 million barrels per day — more than the two major oil shocks together." Birol emphasized that the global economy is facing a "major, major threat," and warned that no country would escape the impact if the crisis worsens. "No country will be immune to the effects of this crisis if it continues to head in this direction. So there is a need for global efforts," he said, expressing his hope that the situation will be resolved quickly. This energy warning comes as a larger conflict unfolds in the Middle East, following a significant increase in hostilities involving Iran. The war has drawn in several regional players and has disrupted crucial oil production and supply routes that are important for global energy markets. Iran, a significant oil producer and a key player in the Persian Gulf, is at the center of the conflict. The fighting has raised concerns about the free flow of oil through the Strait of Hormuz, a vital passage where about 20 percent of the world's oil supply moves through, leading to fears of long-term supply interruptions. The conflict has also led to Israeli military actions against Iranian energy facilities, including a major gas field, which has caused energy prices to rise sharply and heightened worries among Western governments and international organizations about the future stability of global energy supplies.