Global energy markets are now more volatile than at any point since the 1970s, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra, the IEA chief attributed the surge in volatility to the combined effect of the Iran war, the closure of the Strait of Hormuz, and the widespread damage to Gulf energy infrastructure. He described the overall impact as equivalent to the twin oil shocks of the 1970s and the Ukraine gas crisis all at once.
Birol explained that the world entered 2026 with a surplus in global oil markets, but the conflict that erupted on February 28 rapidly reversed that picture. Daily oil losses from the war have reached 11 million barrels, while gas losses stand at 140 billion cubic metres. These figures dwarfed the 5 million barrels per day lost during the combined 1970s crises and the 75 billion cubic metres of gas removed by the Ukraine conflict.
The IEA took its most significant emergency action in history on March 11, releasing 400 million barrels from strategic petroleum reserves. Birol said further releases were under consideration and that only 20 percent of available stocks had been used. He also called on governments to reduce energy demand through working from home, lower speed limits, and reduced air travel — steps taken during past energy emergencies but now applied to a crisis of far greater magnitude.
The Hormuz strait, the world’s most critical oil shipping chokepoint, remains closed after attacks on commercial vessels. The closure has hit Asia-Pacific nations hardest, while European markets have seen tightening supplies of diesel and jet fuel. Birol said increased Canadian and Mexican output could provide some relief to Europe but would not compensate for global losses at scale.
Iran threatened strikes on US and allied energy and water infrastructure after Trump’s 48-hour ultimatum to reopen the strait. Birol met with Australian Prime Minister Anthony Albanese and warned that no country would escape the consequences of prolonged market volatility. He said markets needed both physical supply solutions — starting with Hormuz — and coordinated demand management to have any chance of stabilizing.