The Iran energy crisis has created fresh urgency around developing new deep-water alternative trade routes that could provide genuine bypass options for Gulf energy exports when the Strait of Hormuz is unavailable, the head of the International Energy Agency has said. Fatih Birol, speaking in Canberra, noted that existing pipeline alternatives across Saudi Arabia and the UAE had insufficient capacity to compensate for the full closure of the strait. He described the overall crisis as equivalent to the combined force of the 1970s twin oil shocks and the Ukraine gas emergency.
Birol said the development of additional pipeline capacity from the Gulf region to bypass Hormuz — along with expanded LNG export capacity from non-Gulf producers like the United States, Australia, and Qatar — were both long-term investments that needed to be accelerated in response to the current crisis. While neither would provide immediate relief, both were essential to reducing the world’s catastrophic vulnerability to a repeat of the current situation.
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 assets 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 active consideration and said consultations with governments across three continents were ongoing. 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 Australia’s expanded LNG export capacity could play a significant role in the long-term restructuring of global energy supply patterns.
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 that investment in alternative trade routes was one of the most important long-term responses to the current crisis. He called on governments and energy companies to commit now to the infrastructure investments that would make the world less vulnerable to a future Hormuz closure.