IEA chief warns of ‘largest energy crisis in history’

IEA chief Fatih Birol warns the world faces its largest energy crisis, driven by war, supply disruptions and soaring oil and gas prices.

Fatih Birol, head of the International Energy Agency, has described the current global energy turmoil as “the largest crisis in history,” citing multiple overlapping shocks.

Speaking to French radio, Birol said the combined impact of oil and gas disruptions, alongside geopolitical tensions involving Russia, has created an unprecedented situation for global markets.

He added that the ongoing conflict involving the United States, Israel and Iran has significantly disrupted energy supplies, affecting global supply chains and pushing prices sharply higher.

Rising oil and gas costs have placed heavy pressure on economies worldwide, increasing inflation and straining household budgets, particularly in energy-importing countries.

In response, the IEA agreed in March to release 400 million barrels of oil from strategic reserves among member states — the largest such coordinated release in its history — to stabilise markets.

Global oil prices have surged amid fears of supply disruptions, particularly around the Strait of Hormuz, a critical route for energy shipments.

Recent maritime tensions, including the seizure of an Iranian-linked vessel and threats to shipping lanes, have heightened concerns about sustained supply constraints.

Economists warn that prolonged conflict could deepen the crisis, leading to slower global growth, higher inflation and increased energy insecurity.

Developing countries are expected to be hit hardest, as rising fuel costs translate into higher food prices and broader economic instability.

The warning comes as a fragile ceasefire between the United States and Iran nears expiry, with a second round of talks expected in Islamabad.

While cautious optimism over negotiations has slightly eased oil prices, analysts remain sceptical about a quick resolution.

Birol said the trajectory of the crisis will largely depend on geopolitical developments, warning that further escalation could worsen already severe global energy pressures.

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