IEA Chief Warns of a Historic Energy Crisis as Oil Tops $120

The head of the International Energy Agency, Fatih Birol, warned today (Thursday) at a conference in Paris that the world is approaching a dangerous peak in energy markets. According to him, recent developments are putting the global economy on the brink of what he describes as a crisis unprecedented in scope. Birol said: "Oil and gas markets are experiencing major difficulties. And that is putting heavy pressure on many countries."

Birol’s remarks come amid a sharp surge in energy prices, with oil crossing the $120-per-barrel mark. He emphasized that this is an exceptional development, reinforcing his assessment that the current crisis could be the most severe recorded to date.

Last week, in an interview with the French radio station "France Inter," Birol warned of further deterioration, linking it directly to the escalation between Iran and the United States and Israel. "This is indeed the biggest crisis in history," he said then — a statement he repeated at the international conference in Paris.

According to a report by the Reuters news agency, Brent crude prices reached a four-year high, due in part to growing concerns over global supply. At the center of concern is the Strait of Hormuz — one of the most important energy shipping lanes, through which about one-fifth of the world’s oil and liquefied natural gas flows.

Prolonged disruptions in this area could lead to far-reaching consequences: from intensifying inflationary pressures in many countries, to harming major energy consumers, and increasing the risk of a global economic slowdown.

In an effort to curb the sharp increases, the International Energy Agency already in March approved an extraordinary release of hundreds of millions of barrels of oil from strategic reserves. However, Birol clarified that these steps do not guarantee full stability, warning that the intensity of the current crisis may even surpass that of the major energy crises of the past.