The Iran energy crisis could permanently damage global trust in energy market stability — the foundational assumption on which decades of energy trade, investment, and economic planning have been built — if the crisis is not resolved decisively and quickly, the head of the International Energy Agency has warned. Fatih Birol, speaking in Canberra, said the loss of trust in energy market stability was itself an economic harm that was difficult to quantify but potentially as damaging as the direct supply losses. He described the overall crisis as equivalent to the combined force of the 1970s twin oil shocks and the Ukraine gas emergency.
Birol said that energy investors, industrial planners, and national governments all made long-term decisions based on assumptions about the reliability of global energy supply. When a crisis of this scale demonstrated that those assumptions could be catastrophically wrong, the consequences extended far beyond the immediate supply disruption into the long-term investment and planning decisions that would shape the global energy system for decades. He said restoring trust in energy market stability was as important as restoring the supply itself.
The conflict began February 28 with US and Israeli strikes on Iran and has since removed 11 million barrels of oil per day and 140 billion cubic metres of gas from world markets. At least 40 Gulf energy assets have been severely damaged, and the Hormuz strait — through which approximately 20 percent of global oil flows — remains closed. The IEA deployed 400 million barrels from strategic reserves on March 11 in its largest emergency action.
Birol confirmed further releases were under consideration and said the IEA was consulting with governments across Europe, Asia, and North America. He called for demand-side policies including remote work, lower speed limits, and reduced commercial aviation. He met with Australian Prime Minister Anthony Albanese and said Australia’s stable energy policy framework was itself a contribution to restoring global trust in the possibility of reliable energy supply.
Trump’s 48-hour ultimatum to Iran to reopen the strait expired without result, and Tehran threatened retaliatory strikes on US and allied energy and water infrastructure. Birol concluded that the damage to trust in energy market stability was a real and serious harm that needed to be explicitly addressed in the international response to the crisis. He said rebuilding that trust required both resolving the current emergency and demonstrating through action that the structural vulnerabilities it had exposed were being decisively addressed.