The head of the International Energy Agency, Fatih Birol, has issued a stark warning that the ongoing oil and gas crisis sparked by the blockade of the Strait of Hormuz is more severe than the combined shocks of 1973, 1979, and 2002.
Describing the situation as unprecedented, Birol said the scale of disruption to global energy supply has no historical parallel. “The world has never experienced a disruption to energy supply of such magnitude,” he said in an interview in France.
The crisis was triggered after Iran effectively choked off traffic through the Strait of Hormuz—a vital corridor through which roughly 20 per cent of global oil and gas supplies flow—following military strikes involving the United States and Israel. The resulting supply squeeze has driven a surge in energy prices and heightened global economic uncertainty.
According to Birol, while advanced economies in Europe, as well as countries like Japan and Australia, will feel the strain, developing nations face the gravest risks. He warned that these economies are particularly vulnerable to rising fuel costs, escalating food prices, and accelerating inflation.
In response, member countries of the IEA have begun releasing strategic petroleum reserves in a coordinated effort to stabilise markets. Birol confirmed that the process is ongoing, with some volumes already injected into the system to ease supply pressures.
Meanwhile, a separate report by the Organisation for Economic Co-operation and Development has highlighted a parallel and persistent economic threat: the long-term impact of post-Covid illness, widely referred to as long Covid.
The study estimates that long Covid is costing 38 leading economies across Europe, the Americas, and East Asia approximately $135 billion annually. It warned that the condition could weigh on economic performance for at least a decade, primarily through reduced workforce participation and declining productivity.
The OECD report found that the broader economic impact—stemming from absenteeism, reduced efficiency, and workers exiting the labour market—far exceeds the direct healthcare costs associated with treating the condition. It projects that economic growth across affected countries could be reduced by between 0.1 and 0.2 percentage points annually.
“This work provides, for the first time, a comprehensive estimate of the economic burden of long Covid,” said Guillaume Dedet, who coordinated the publication. He noted that the pandemic’s economic toll extends well beyond its acute phase, with lingering health effects continuing to drag on productivity and output.
The report described long Covid as both a health crisis and a structural economic challenge, warning that its true cost is likely underestimated. It also underscored gaps in policy responses, noting that while many governments have developed health-sector strategies, coordination with employment, education, and social protection systems remains limited.
Defined as symptoms persisting for at least three months after initial infection, long Covid affects millions globally. In the United States alone, an estimated 18 million adults are believed to be living with the condition, experiencing symptoms ranging from fatigue and respiratory difficulties to cognitive impairment.
Although scientific understanding of long Covid remains incomplete, emerging research suggests it may be linked to prolonged immune responses and chronic inflammation. Experts say addressing these underlying mechanisms could be key to mitigating its long-term impact.
As the global economy grapples simultaneously with an unprecedented energy supply shock and the lingering effects of the pandemic, policymakers face mounting pressure to coordinate responses that address both immediate disruptions and deeper structural vulnerabilities.