The Iran energy crisis is exposing deep weaknesses in global energy emergency insurance systems that were not designed to handle infrastructure damage on the current scale, the head of the International Energy Agency has warned. Fatih Birol, speaking in Canberra, said the severe damage to at least 40 Gulf energy assets had triggered insurance claims and financial exposure of a magnitude that existing systems were struggling to process. He described the overall crisis as equivalent to the combined force of the 1970s twin oil shocks and the Ukraine gas emergency.
Birol said that beyond the physical challenge of repairing damaged infrastructure, the financial architecture for managing large-scale energy infrastructure damage in conflict zones was inadequate. War risk insurance had historically been limited in scope, expensive, and slow to pay out. He said the current crisis was exposing these limitations at the worst possible time and called for reforms to global energy infrastructure insurance systems.
The conflict began February 28 with US and Israeli strikes on Iran and has since removed 11 million barrels of oil per day and 140 billion cubic metres of gas from world markets. At least 40 Gulf energy facilities have been severely damaged, and the Hormuz strait — through which approximately 20 percent of global oil flows — remains closed. The IEA deployed 400 million barrels from strategic reserves on March 11 in its largest emergency action.
Birol confirmed further releases were under consideration and said the IEA was consulting with governments across Europe, Asia, and North America. He called for demand-side policies including remote work, lower speed limits, and reduced commercial aviation. He met with Australian Prime Minister Anthony Albanese and said the financial dimensions of the crisis deserved urgent government attention alongside the supply and demand management challenges.
Trump’s 48-hour ultimatum to Iran to reopen the strait expired without result, and Tehran threatened retaliatory strikes on US and allied energy and water infrastructure. Birol concluded by calling for a review of global energy infrastructure insurance frameworks as part of the post-crisis reform agenda. He said the world needed insurance systems that could handle crises of this scale — both to facilitate faster recovery and to provide appropriate risk incentives for infrastructure protection.
