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The war involving Iran is already “the greatest global energy security threat in history”, Fatih Birol has said, a warning he first issued in March as the crisis escalated.
“The world is becoming a dangerous place,” he added on Monday, underscoring how energy is now firmly at the centre of geopolitical risk.
Speaking at the Atlantic Council in Washington, the head of the International Energy Agency described a global system under mounting strain from conflict, damaged infrastructure and uneven resilience across economies.
“More than 80 facilities have been damaged, oilfields, refineries, terminals and so on,” he said. “Out of this 80-plus, more than a third, are severely … severely damaged.”
Uneven impact
The effect of the war is being felt most acutely in vulnerable economies, said Mr Birol. Countries that lack “financial muscles” will be hit hardest, he said, particularly in parts of the Middle East.
Iraq is among the most exposed, with the IEA head noting “they don’t have storage capacity”. He added that the country relies heavily on oil, with much of government income dependent on the sector and millions of people reliant on salaries and pensions tied to it.
He also pointed to broader pressures across Asia and the Middle East, noting that countries including China and Japan face “serious problems” linked to high prices and supply constraints, while even some Gulf economies such as Kuwait and Bahrain are not immune to the strain.
Mr Birol also warned that such economies face significant strain when revenues fall sharply, particularly in politically fragile environments. “I'm worried about Lebanon," he added.
When asked for his top three guidelines for the current energy crisis, he said that he had one:
“[The] number one rule for energy security is diversification. Diversify from whom you get your energy, diversify your energies, diversify your trade routes,” Mr Birol said.
He added that future energy partnerships may no longer be driven primarily by price, saying decisions will depend on “how reliable my partner is”.
As the IEA continues to deal with sustained volatility in global energy markets, its leadership has consistently viewed recent developments as part of a deeper structural shift rather than a series of isolated crises.
New policy era
Mr Birol has repeatedly highlighted how geopolitical tension from Russia’s invasion of Ukraine to instability in key transit routes have exposed the fragility of global energy systems and elevated security concerns to the forefront of policymaking.
Recently the Paris-based inter-governmental organisation has emphasised that successive global shocks have led to an unprecedented wave of government intervention.
More than 6,500 energy policy measures have been introduced across dozens of countries, while public spending on energy has more than doubled since 2019, the IEA said in a blog post on Friday. This expansion reflects what the agency has described as a “new energy policy era”, in which affordability, security and sustainability are being addressed simultaneously, rather than sequentially.
Mr Birol has said such responses echo the structural shifts seen after the oil shocks of the 1970s.
The importance of that shift has been underscored by recent geopolitical tensions. A surge in oil prices, linked in part to instability involving Iran and concerns over supply routes, has reinforced longstanding IEA warnings about the vulnerability of global energy systems to disruption. Mr Birol has said chokepoints and trade routes are critical risks to global supply.
In response, the IEA co-ordinated what he described as “the largest ever in our history” stockpile release, sending 400 million barrels of oil in March to stabilise markets.
At the same time, the IEA has highlighted a divergence in expectations about the future of oil demand. While some producers anticipate continued long-term growth, the agency has pointed to structural drivers such as electrification, efficiency gains and policy support for cleaner technology that could temper demand over time.
The agency has also indicated that demand will remain resilient in the coming decades, with projections showing that global oil demand could rise to 113 million barrels per day by 2050, even as growth gradually slows.
Beyond oil, the IEA has also drawn attention to rapidly rising electricity demand, particularly in emerging markets. Mr Birol has stressed that developing economies are likely to be among the hardest hit by energy shocks, given their reliance on imports and limited fiscal capacity to respond.
