The global petrochemical industry faces deep and potentially lasting disruption as a result of the Iran war’s impact on Gulf supply chains, the head of the International Energy Agency has warned. Fatih Birol, speaking in Canberra, said the conflict had disrupted vital arteries of the global economy including supplies of petrochemicals, fertilizers, sulfur, and helium — not just oil and gas. He described the overall energy crisis as the equivalent of the twin 1970s oil shocks and the Ukraine gas emergency combined.
The conflict began February 28 with US and Israeli strikes on Iran and has since led to the closure of the Strait of Hormuz and severe damage to Gulf energy and industrial infrastructure. Oil losses have reached 11 million barrels per day, while gas losses total 140 billion cubic metres — surpassing all previous energy crises combined. At least 40 Gulf energy assets have been severely damaged, complicating any prospect of a rapid industrial recovery.
Birol explained that the petrochemical sector is heavily dependent on Gulf feedstocks, and the disruption of supply chains from the region would cascade through manufacturing industries worldwide. Fertilizer production, which relies heavily on natural gas as a feedstock, would also be significantly affected, raising concerns about agricultural supply chains and food prices. Sulfur and helium, both produced in significant quantities in the Gulf, are essential for medical and industrial applications globally.
The IEA released 400 million barrels of oil from strategic reserves on March 11 and called for demand-reduction measures including remote working, lower speed limits, and reduced commercial flights. Birol said the agency was consulting with governments across three continents about further reserve releases. He stressed that oil reserve releases, while helpful for fuel markets, could not directly address the broader industrial supply chain disruptions.
Trump’s 48-hour deadline for Iran to reopen the Hormuz strait expired without result, and Tehran threatened retaliatory strikes on US and allied energy and water infrastructure. Birol met with Australian Prime Minister Anthony Albanese and called for coordinated international action. He warned that the industrial and agricultural consequences of the crisis would compound the energy and economic damage if the conflict continued for much longer.
