Global energy crisis surpasses 1970s shocks amid Iran standoff

Monday 23 March 2026 - 09:21

By: Dakir Madiha

Global energy crisis surpasses 1970s shocks amid Iran standoff

The world is facing an energy crisis more severe than the combined oil shocks of the 1970s, the International Energy Agency warned, as tensions between the United States and Iran escalate over control of the Strait of Hormuz.

The warning comes as US President Donald Trump issued a 48-hour ultimatum threatening to destroy Iranian power plants if Tehran does not fully reopen the vital shipping route. Iran responded by pledging to completely close the strait and target US and Israeli energy infrastructure across the region, raising the risk of a broader economic disruption.

The International Energy Agency said global oil supply has already fallen by about 11 million barrels per day since the conflict began on February 28. The Strait of Hormuz, which normally carries around 20 percent of global oil and liquefied natural gas shipments, has been largely inaccessible to commercial traffic since early March.

Trump’s ultimatum, delivered via social media, warned of immediate strikes on Iran’s energy infrastructure if the strait is not reopened without conditions. Iranian military command said any attack on its power facilities would trigger a full closure of the strait until damaged infrastructure is restored. Iranian authorities also warned they would strike energy, telecommunications and desalination assets linked to the United States and Israel.

The standoff has intensified pressure on global markets. Oil prices have surged more than 50 percent since the conflict began, with Brent crude rising above $110 per barrel. Financial markets have reacted sharply, with global equities under strain and US Treasury yields climbing to their highest levels since late July.

IEA Executive Director Fatih Birol described the situation as a combination of multiple energy shocks, citing damage to at least 40 energy facilities across nine countries. The agency has coordinated the release of 400 million barrels from strategic reserves and is considering further emergency measures with governments.

Governments are preparing for economic fallout. In the United Kingdom, Prime Minister Keir Starmer convened an emergency COBRA meeting with senior officials, including the Bank of England governor, to assess the impact of rising energy costs.

The conflict shows no sign of easing. US Central Command said it has struck thousands of targets and dozens of Iranian vessels, while military planning has expanded to include potential ground operations and control of key oil export terminals. With neither side indicating a willingness to de-escalate, the agency warned that the global economy faces a significant and growing threat.