IEA: More than 40 energy facilities in the Middle East suffered "severe damage," with an impact comparable to the combined total of the two historic oil crises!

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The International Energy Agency warns that the scale of disruption to the global energy supply chain caused by the Middle East war is unprecedented, the restoration period will be prolonged, and the only short-term solution lies in the reopening of the Strait of Hormuz.

Fatih Birol, Executive Director of the International Energy Agency (IEA), said on Monday, the Middle East war has led to more than 40 energy facilities in nine countries suffering "severe or extremely severe" damage, and the recovery of oil fields, refineries, and pipelines will take a considerable amount of time. He warned that the impact this time is equivalent to the combined effects of the two major oil crises of the 1970s and the natural gas crisis triggered by the Russia-Ukraine conflict in 2022.

Birol pointed out that the damage has far exceeded the oil and gas sector—critical trade routes for petrochemicals, fertilizers, sulfur, helium, and other key components of the global economy have all been disrupted, which will "have serious consequences for the global economy." Asia is at the forefront of this crisis due to its high dependence on oil imports from the region.

IEA announced in early March the release of a record 400 million barrels of emergency oil reserves and proposed demand-side management measures, but Birol emphasized that the only real solution to the fuel supply problem is the reopening of the Strait of Hormuz.

Unprecedented scale of damage, timeline for resumption highly uncertain

Birol revealed these details on Monday at the National Press Club in Canberra, Australia. He stated that over 40 energy assets across nine Middle Eastern countries, with damage levels ranging from "severe" to "extremely severe," are involved, including oil fields, refineries, and oil pipelines—core infrastructure.

This scale means that even if the conflict ends, normalization of the global energy supply chain will still be a lengthy process. Birol did not give a specific restoration timetable, but his wording indicates that a fundamental improvement is unlikely in the short term.

The more than three weeks of Middle East conflict have put comprehensive pressure on the global energy supply chain. The Strait of Hormuz—the world's most important oil transit chokepoint—has seen shipping nearly grind to a halt, pushing up prices of crude oil, natural gas, and refined petroleum products.

Birol compared the current impact to three major energy crises in history: the two oil crises of the 1970s and the European natural gas crisis after the 2022 Russia-Ukraine conflict, “all stacked together.” He stated that with shipping in the Strait of Hormuz nearly paralyzed, the release of strategic reserves can only ease short-term pressure, not be a fundamental solution.

Trade of petrochemicals, fertilizers, and helium fully disrupted, effects spill over into the real economy

The impact of this crisis extends beyond the energy sector itself. Birol pointed out that the trade of petrochemical products, fertilizers, sulfur, and helium has all been hit, and these commodities are deeply embedded in global agriculture, industry, and high-tech supply chains. Their trade disruption will have profound impacts on the world economy.

Asia’s vulnerability is particularly acute. Birol said that Asia’s high dependence on Middle Eastern oil makes it the first to be affected. When asked about China’s restriction on fuel exports, he called on all countries to work together to address the crisis and hinted that implementing strict export restrictions without sufficient justification “may not win credit with the international community.”

Facing unprecedented pressure, the IEA announced in early March the release of 400 million barrels of emergency oil reserves, the largest scale in the agency’s history. Last week, the Paris-based agency also proposed a series of measures to help energy-importing countries reduce demand.

Birol stated that if the situation worsens in the coming days or weeks, the IEA could further release reserves as needed. However, he also stressed that these measures are only emergency responses—in the context of shipping in the Strait of Hormuz being nearly halted, the only real way to solve the fuel supply issue is to restore the full operation of this key global energy trade route.

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