IEA Warns Iran War Could Trigger a Global Energy Shock Worse Than the 1970s

Energy Crisis Fears Rise

The war involving Iran could spark a global energy shock that rivals, and possibly exceeds, the oil crises of the 1970s. That is the latest warning from International Energy Agency chief Fatih Birol, who says the growing disruption in the Gulf has become a major threat to the world economy.

Speaking in Canberra, Birol said the situation is not just about oil. It now affects natural gas and refined fuels as well. That wider impact makes the current crisis more dangerous for global markets. As a result, countries that rely heavily on energy imports, especially in Asia and Europe, face rising pressure.

Strait of Hormuz Becomes the Main Risk

At the center of the crisis is the Strait of Hormuz, one of the world’s most important energy shipping routes. If flows through the strait remain blocked or limited, energy markets could stay under strain for months.

Reports suggest the conflict has already removed around 11 million barrels of oil per day from supply. Gas losses have also reached roughly 140 billion cubic meters. That combination has raised fears of a fresh wave of inflation and weaker economic growth.

Key concerns include:

• higher fuel and shipping costs
• rising manufacturing and transport expenses
• inflation pressure on households and businesses
• tighter central bank policy for longer

The IEA has already responded by coordinating the release of 400 million barrels from emergency reserves. However, Birol made it clear that stockpiles can only buy time. They cannot fully replace stable energy flows from the Gulf.

Long Recovery Could Extend Pain Into 2026

Investors now seem to believe this is more than a short-term wartime spike. According to recent reports, damaged oil and gas infrastructure may take more than six months to recover, even if fighting starts to ease soon.

That matters because expensive energy usually spreads through the economy fast. For example, when fuel costs climb, transportation, food, and factory prices often follow. Therefore, the Iran war is no longer just a regional conflict. It is becoming a global economic risk that policymakers cannot ignore.