IEA Says Iran War Has Stripped 13 Million Barrels a Day as Asia Turns Back to Coal
The agency calls it the biggest energy security threat in history, and Asian governments are burning coal and draining subsidies to cover the shortfall.
Fatih Birol, head of the International Energy Agency, told CNBC that the world has lost 13 million barrels a day of oil supply since the US and Israel went to war with Iran, calling it "the biggest energy security threat in history."1 He spoke on Thursday (2026-05-14) at CNBC's CONVERGE LIVE in Singapore, describing major disruptions across vital commodities.1
The damage lands hardest not on the United States but on Asia. A fifth of the world's oil and LNG normally moves through the Gulf region, and 90% of those supplies are destined for Asia, according to Carbon Brief.2 Only around 7% of US oil imports pass through the Strait of Hormuz, which is why the American exposure is modest and the Asian exposure acute.3
The LNG side has moved faster than crude. Damage to Qatar's export infrastructure and the blockade of Hormuz cut supply, pushing Asian LNG prices above $25 per unit in reporting from March (2026-03-26).7 Henning Gloystein of Eurasia Group, cited by the Guardian, estimated that almost 30 billion cubic metres of LNG had been lost from the global supply chain, with more than 80% of that disappearing from the Gulf.6
Governments are responding the fastest way they can, which means coal. Across Asia, administrations are ramping up the dirtiest fossil fuel to cover shortfalls where LNG has vanished, drawing warnings from climate experts, according to the Guardian.5 Birol expects the trend to build, telling CNBC he anticipates coal "may also see a push and go back up, especially in some big countries in Asia."1
The policy scramble is broad. One month into the war, at least 60 countries had taken emergency measures, announcing nearly 200 policies to save fuel, support consumers and boost domestic output, Carbon Brief found.2
Refined products are their own emergency. Birol said Europe draws about 75% of its jet fuel from Middle Eastern refineries and that this supply is now effectively zero.1 Jet fuel and diesel dislocations tend to bite before crude scarcity reaches the pump, hitting aviation and freight directly.1
The fiscal arithmetic is what makes this hard to sustain. Holding pump prices flat with crude at $100 a barrel would cost Asian governments around 1% of GDP a year, according to the Centre for Global Development.4 Few can carry that for long, yet letting prices rise is politically fraught, with farmers and low-income households exposed first.4
The IEA has leaned on its emergency toolkit. The 32-member agency agreed in March (2026-03) to release 400 million barrels from strategic stockpiles to blunt the disruption.1 Against a stated loss of 13 million barrels a day, that is a buffer measured in weeks, not a fix.1
Prices have since come well off crisis peaks. By 2026-07-12, ICE Brent crude front-month stood at $75.22 and JKM Asian LNG at $16.52, both far below the levels described in the May reporting, when Asian LNG traded above $25 per unit.7 Newcastle physical coal near $117 keeps the switching economics that pulled Asia back toward coal firmly in view.5
The unresolved risk is whether the coal reversion outlasts the crude relief. Subsidy programmes that governments stood up under duress are hard to unwind, and utilities that recommissioned coal capacity will run it as long as LNG stays scarce or expensive.6 Watch whether Gulf LNG volumes return toward the 30 billion cubic metres Gloystein flagged as lost, and whether Asian coal demand climbs further as Birol expects.6,1