The world is grappling with an energy crisis more severe than the oil shocks of the 1970s, the head of the International Energy Agency has warned, as mounting supply disruptions rattle global markets and raise fears of economic fallout.
IEA Executive Director Fatih Birol described the situation as “very severe,” noting that the scale of current supply losses has already surpassed the combined impact of the 1973 and 1979 oil crises—two events that triggered global recessions.
Birol said he initially chose to stay silent in the early days of the crisis but broke that silence after concluding that global leaders were underestimating its magnitude.
“As the crisis unfolded, I decided not to speak publicly for several weeks,” he said. “But it became clear that the depth of the problem was not fully appreciated by decision-makers.”
According to the IEA, the world has already lost around 11 million barrels of oil per day—exceeding the roughly 10 million barrels per day lost during both major oil shocks of the 1970s combined. The comparison, Birol warned, underscores the unprecedented nature of the current disruption.
Compounding the crisis are severe gas supply shortages, particularly in Europe, following Russia’s invasion of Ukraine. While earlier disruptions cut about 75 billion cubic metres of gas, current losses have nearly doubled to around 140 billion cubic metres, intensifying pressure on already strained energy systems.
“This is not just an oil crisis,” Birol emphasized. “It is effectively multiple shocks happening at the same time—two oil crises and a gas crisis combined.”
At the heart of the turmoil is the Strait of Hormuz, a critical global chokepoint through which roughly a fifth of the world’s oil supply typically flows. Ongoing tensions and partial disruptions in the region have sharply reduced tanker traffic, tightening supply and driving volatility across markets.
But the impact extends far beyond oil and gas. The disruption has begun to choke key industrial supply chains, affecting essential commodities such as petrochemicals, fertilisers, sulphur, and helium—materials vital to agriculture, manufacturing, and technology sectors worldwide.
Analysts warn that the cascading effects could trigger widespread economic strain, from rising inflation and industrial slowdowns to increased uncertainty across global markets.
As governments scramble to respond, the IEA cautions that the crisis could prove to be one of the most complex and far-reaching energy shocks in modern history, testing the resilience of economies and energy systems alike.
