Global economy faces “major threat” from Strait of Hormuz crisis, warns IEA chief

The global economy faces a “major threat” from the energy shock triggered by the Middle East war, and “no country will be immune” if the crisis persists, warned Fatih Birol, head of the International Energy Agency, on Monday.

Speaking at the National Press Club in Australia, Birol likened the current turmoil to the oil crises of the 1970s and the fallout from Russia's 2022 invasion of Ukraine.

“This situation is effectively two oil shocks combined with a gas crisis,” he said, cautioning that the global economy is under severe strain and urging swift resolution.

He stressed that if the crisis continues, its impact will be felt worldwide, underscoring the need for coordinated global action.

Tensions have escalated as Donald Trump and Tehran exchanged threats during the fourth week of the conflict, with Washington demanding the reopening of the Strait of Hormuz—a critical route that carries about 20 percent of global oil and gas shipments.

The disruption has nearly brought petroleum flows through the narrow passage to a halt, pushing oil prices higher, with US benchmark crude briefly nearing $100 per barrel on Monday.

Birol also noted that at least 40 energy facilities across the region have been severely damaged in the ongoing conflict.