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

International Energy Agency warns that the scale of disruption to the global energy supply chain caused by the Middle East war is unprecedented, with a long recovery period. The only short-term solution is the reopening of the Strait of Hormuz.

Fatih Birol, Executive Director of the IEA, stated on Monday that the Middle East war has caused more than 40 energy facilities across nine countries to suffer “severe or very severe” damage, and the restoration of oil fields, refineries, and pipelines will take a considerable amount of time. He warned that this impact is equivalent to the combined effect of two major oil crises in 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 sectors—key trade channels for petrochemical products, fertilizers, sulfur, and helium, which are vital to the global economy, have all been disrupted. “This will have serious consequences for the global economy.” Asia, heavily dependent on Middle Eastern oil imports, is at the forefront of this crisis.

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

Unprecedented scale of damage, highly uncertain recovery timeline

Birol disclosed these details at a National Press Club event in Canberra, Australia, on Monday. He said over 40 energy assets are located across nine Middle Eastern countries, with damage ranging from “severe” to “very severe,” involving core infrastructure such as oil fields, refineries, and pipelines.

This scale means that even if the conflict ends, normalizing the global energy supply chain will still be a lengthy process. Birol did not provide a specific timeline for recovery but indicated that short-term improvements are unlikely.

More than three weeks of Middle Eastern conflict have put the global energy supply chain under immense pressure. The Strait of Hormuz—the world’s most critical oil shipping passage—is nearly at a standstill, causing sharp rises in crude oil, natural gas, and refined product prices.

Birol compared the current situation to three major historical energy crises: two oil crises in the 1970s and the European natural gas crisis following the Russia-Ukraine conflict in 2022, “all stacked together.” He stated that with shipping through the Strait of Hormuz approaching a halt, releasing strategic reserves can only alleviate short-term pressure, not provide a fundamental solution.

Trade in petrochemicals, fertilizers, and helium has been completely disrupted, with ripple effects on the real economy

The impact of this crisis has extended beyond the energy sector itself. Birol pointed out that the trade of bulk commodities such as petrochemical products, fertilizers, sulfur, and helium has been affected, which are deeply embedded in global agriculture, industry, and high-tech supply chains. Disruptions in these trades will have far-reaching effects on the global economy.

Asia is particularly vulnerable. Birol said that Asia’s high dependence on Middle Eastern oil makes it the most affected. When asked about China’s decision to restrict fuel exports, he called for countries to work together to address the crisis and hinted that imposing strict export restrictions without sufficient justification “may not be well received by the international community.”

In response to unprecedented pressure, the IEA announced a record release of 400 million barrels of emergency oil reserves in early March. 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 further in the coming days or weeks, the IEA could consider additional reserve releases as needed. However, he emphasized that these measures are only emergency relief—under the backdrop of the Strait of Hormuz nearing a shutdown, the only real solution to the fuel supply issue is the reopening of this critical global energy trade route.

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