Energy has become the defining geopolitical issue of 2026, and the Iran war is the reason why, according to Fatih Birol, the head of the International Energy Agency. Speaking in Canberra, the IEA chief said the conflict had created an energy emergency equivalent to the combined force of the 1970s twin oil shocks and the Ukraine gas disruption — transforming a global energy surplus into a dangerous shortage almost overnight. He said every major diplomatic and security conversation in the world now had energy at its center.
The conflict began February 28 with US and Israeli strikes on Iran, leading quickly to the closure of the Strait of Hormuz and severe damage to Gulf energy infrastructure. Oil losses from the conflict have reached 11 million barrels per day, while gas losses stand at 140 billion cubic metres. These figures far exceed those of any previous energy crisis, and Birol said they were now shaping the foreign policy calculations of governments on every continent.
The IEA took historic action on March 11, releasing 400 million barrels of oil from strategic reserves — the largest emergency action in its history. Birol said the IEA was in active consultation with governments across Europe, Asia, and North America about whether further releases were needed, noting only 20 percent of available stocks had been deployed. He also called for demand-side measures including remote working, lower speed limits, and reduced air travel.
The Hormuz strait, through which about 20 percent of global oil flows, remains closed after attacks on commercial vessels. The Asia-Pacific region has been hardest hit, with Japan signaling potential willingness to contribute minesweeping assets if a ceasefire is achieved. Birol said changes to diesel and jet fuel availability were also being felt in European markets, and that Canada and Mexico’s increased output could provide only partial relief.
Iran threatened retaliatory strikes on US and allied energy and water infrastructure after Trump’s 48-hour ultimatum passed without result. Birol warned that fuel hoarding by individual nations was making the global situation worse. His overall message was clear: energy security is now the world’s most urgent geopolitical challenge, and it demands the kind of coordinated, sustained international engagement that only true multilateral effort can deliver.
