International Energy Agency head says global economy faces ‘major, major
threat’ from Iran war
[March 23, 2026] By
CHARLOTTE GRAHAM-MCLAY
WELLINGTON, New Zealand (AP) — The head of the International Energy
Agency said Monday that the global economy faces a “major, major threat”
because of the Iran war.
“No country will be immune to the effects of this crisis if it continues
to go in this direction,” Fatih Birol said at Australia’s National Press
Club in Canberra on Monday.
The crisis in the Middle East, he said, has had a worse impact on oil
than the two oil shocks of the 1970s combined, and a worse effect on gas
than the Russia-Ukraine war.
Israel launched a new wave of attacks early Monday against Tehran. U.S.
President Donald Trump also warned the United States will “obliterate”
Iran’s power plants if Tehran doesn’t fully open the Strait of Hormuz
within 48 hours. That prompted Iran to say it would respond to any such
strike with attacks on U.S. and Israeli energy and infrastructure
assets.
Trump is facing increasing pressure at home to secure the strait as oil
prices soar.
One major fear is that the war could knock out oil and gas production in
the Middle East for a long time, which would mean high prices could last
a while and cause inflation to rip higher around the world. The U.S.
stock market has a history of bouncing back relatively quickly from past
conflicts in the Middle East and elsewhere, as long as oil prices don’t
stay too high for too long.
Iran on Monday renewed strikes on its Gulf neighbors and threatened to
start hitting their power plants.
“The situation is very severe,” Birol said in Australia.
The oil crises of 1973 and 1979, he said, lost together 10 million
barrels per day, causing "major economic problems around the world, the
recessions. And today, only as of today, we lost 11 million barrels per
day — so more than two major oil shocks put together.”
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International Energy Agency Executive Director Fatih Birol speaks at
the National Press Club in Canberra, Australia, Monday, March 23,
2026. (Lukas Coch/AAP Image via AP)
 After Russia’s invasion of Ukraine,
he said, the gas markets, especially in Europe, “lost about 75
billion cubic meters, 75BCM. And as of now, as a result of this
crisis, we lost about 140BCM, almost twice (as much).”
Birol said 40 energy assets in nine countries across the region were
“severely or very severely damaged.”
“Some of the vital arteries of the global economy, such as
petrochemical, such as fertilizers, such as sulfur, such as helium —
their trade is all interrupted, which would have serious
consequences for the global economy,” he said.
He said the International Energy Agency, “in order to comfort the
markets,” earlier released 400 million barrels of oil, “which is
historic. We have never released so much oil to the markets. ... The
single most important solution to this problem is opening up the
Hormuz Strait as things stand now.”
The official added that he was consulting with governments in
Europe, Asia, North America and the Middle East about the prospect
of releasing further stockpiled oil.
“We will see, we will look at the markets,” he said. “If it is
necessary, of course, we will do it, but we will look at the
conditions, we will analyze, assess the market and discuss with our
member countries.”
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AP writer Foster Klug contributed to this report from Tokyo.
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