Global economy faces major threat amid worsening energy crisis: IEA chief

Paris [France], March 23 (ANI): The world could be heading towards one of the most severe energy crises in decades, International Energy Agency (IEA) Chief Fatih Birol has warned, citing escalating disruptions in the Middle East due to the ongoing conflict.

Speaking before the National Press Club of Australia on Monday, Birol said that at least 40 energy assets across the Middle East have been "severely or very severely" damaged, raising serious concerns over global energy supply stability.

He cautioned that the situation is evolving into a crisis of unprecedented scale, combining multiple shocks to the global energy system. "The crisis, as things stand, is now two oil crises and one gas crash put all together," Birol said. "The global economy is facing a major, major threat today, and I very much hope that this issue will be resolved as soon as possible."

Birol underlined that the damage to critical infrastructure in the Middle East, a region central to global oil and gas supply, could significantly disrupt markets, leading to price volatility and supply shortages worldwide. The warning comes at a time when several economies are already grappling with inflationary pressures and slowing growth.

Drawing parallels with past disruptions, Birol compared the current situation to the energy crises of the 1970s, when oil embargoes triggered sharp increases in fuel prices and widespread economic turmoil. He also referenced the global energy shock following Russia's invasion of Ukraine in 2022, which disrupted gas supplies, particularly in Europe, and forced countries to seek alternative energy sources at higher costs.

According to the IEA Chief, the present crisis is more complex as it combines elements of both oil and gas disruptions, amplifying risks for the global economy. The potential for prolonged conflict in the Middle East further adds to uncertainty, with fears that additional energy infrastructure could be affected.

The warning from the IEA comes as policymakers and global institutions closely monitor developments in the region, with concerns that any further escalation could deepen the crisis.

Birol reiterated the urgent need for diplomatic efforts to stabilise the situation, stressing that resolving the conflict remains key to preventing further deterioration in global energy markets and safeguarding economic stability. (ANI)

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