In the Philippines, government offices are now open only four days a week. Workers are banned from using elevators. In Thailand, public employees are told to take the stairs. In Zimbabwe, Pakistan, and Bangladesh, fuel shortages have become critical. In Europe, Shell warned that fuel stations could run dry by April. In the US, gas prices rose every single day for four consecutive weeks.
The International Energy Agency called this the “greatest global energy security challenge in history.” The IEA head Fatih Birol said on March 23: “No country will be immune to the effects of this crisis if it continues to go in this direction.” Moreover, MIT energy economist Christopher Knittel put it plainly: “What we’re seeing is infrastructure actually being destroyed, which means the ramifications of this war are going to be long-lived.” Furthermore, the World Food Programme warned that 45 million more people could fall into acute food insecurity if the conflict does not end soon. As a result, one question is being asked from Wall Street to village markets in Southeast Asia: is this the biggest global crisis since the COVID-19 pandemic?
The Scale: How This Crisis Compares to COVID
| Crisis Factor | COVID-19 (2020) | Iran War (Now) | Verdict |
| Speed of economic shock | Immediate — global lockdowns in weeks | Immediate — oil surged 50% in 4 weeks | Comparable speed |
| Energy markets | Oil crashed to negative prices — demand collapse | Oil surged to $116 — supply collapse | Opposite but equally severe |
| Supply chain disruption | Factories shut — goods stopped | Shipping stopped — goods cannot move | Comparable severity |
| Food security threat | Disrupted distribution — logistics failure | Fertiliser shortage — 40% of world supply via Hormuz | Potentially worse for agriculture |
| Global GDP impact | IMF: -3.5% (worst since Great Depression) | Chatham House: -0.3 to -0.4pp if oil stays at $85 | Less severe — but infrastructure damage extends it |
| Duration of disruption | 18 months — until vaccines arrived | Unknown — Hormuz reopening timeline unclear | COVID had a clear endpoint — this does not |
| Countries declaring emergencies | Virtually all nations | Philippines, Zimbabwe, Pakistan, Bangladesh — growing | Concentrated in developing world |
| Western response | Lockdowns — trillions in stimulus | Military operations — limited civilian relief | Fundamentally different tools |
“A week ago or certainly two weeks ago, I would have said: If the war stopped that day, the long-term implications would be pretty small,” Knittel told Fortune. “But what we’re seeing is infrastructure actually being destroyed.” Moreover, the Ras Laffan LNG facility in Qatar suffered damage that will take 3-5 years to fully repair. Furthermore, Chatham House confirmed that unlike COVID — where recovery followed vaccination — the Iran war’s infrastructure destruction creates lasting damage. As a result, the comparison to COVID is not hyperbole. It is a measurement of scale.
The Energy Crisis: Biggest Supply Disruption in History
The IEA did not use careful language. It called this the largest supply disruption in the history of the global oil market. That statement includes the 1973 Arab oil embargo, the 1979 Iranian Revolution, and the 1990 Gulf War. None of those events came close to the total volume now affected.
The Strait of Hormuz carries 20% of global oil and 20% of global LNG. Its near-total closure removed 8-10 million barrels per day from effective supply. Asian LNG spot prices surged 143% to $25.30 per million BTU. European gas hit double its pre-war price. Moreover, Qatar’s Ras Laffan — the world’s largest LNG export facility — suffered direct missile strikes. Its 17% production capacity reduction will persist for years. Furthermore, global LNG supply forecasts for the year have been cut by up to 35 million tonnes. As a result, the energy market faces not just a price shock but a structural supply reduction that will not reverse when the guns stop firing.
| Energy Market | Before War | Now | Recovery Timeline |
| Brent crude oil | $65-70/barrel | $100-116/barrel | Rapid if Hormuz reopens — months if not |
| Asian LNG spot prices | ~$10.50/mmBtu | $25.30/mmBtu (+143%) | Years — Qatar Ras Laffan 3-5 yr repair |
| European TTF gas | EUR30/MWh | EUR60+/MWh (doubled) | Dependent on alternative LNG supply |
| Global LNG supply forecast | Baseline | Cut by 35 million tonnes for full year | Permanent for this year — Qatar damage lasting |
| Qatar LNG production capacity | 100% | 83% (-17% from missile strike) | 3-5 years to fully repair |
| Strait of Hormuz traffic | Normal — 20M bpd | Near-zero for US-allied vessels | Unknown — political not technical decision |
| Fertiliser (urea) prices | Baseline | Up 50% since war began | Slow — gas needed to produce fertiliser |
| Sulphur supply | Normal — Gulf = 45% of global supply | Severely disrupted | Months to reroute supply chains |
The Food Crisis: Worse Than Ukraine
The energy story is the headline. But the food story may be the more severe long-term consequence. Multiple expert organisations now say the Iran war threatens global food security more severely than Russia’s 2022 invasion of Ukraine.
The mechanism is specific. The Persian Gulf provides one-third of the world’s traded urea — the most widely used fertiliser. It provides one-quarter of global ammonia. Up to 40% of world nitrogen fertiliser exports pass through the Strait of Hormuz. That supply is now blocked. Urea prices jumped 50% since the war began. Ammonia is up 20%.
Farmers who cannot buy fertiliser at any price cannot plant their spring crops. QatarEnergy halted production at the world’s largest urea plant after shutting down its LNG output. India cut production at three domestic urea plants because Qatari gas supply collapsed. Brazil — the world’s largest agricultural exporter — imports 85% of its fertiliser. Egypt needs Qatari gas to produce its own. For a full breakdown of the energy and supply chain disruption driving these food security risks, read our analysis: US, UK and Europe Prepare for a Long Iran War — What Comes Next?.
The World Food Programme warned that 45 million more people could fall into acute food insecurity. The British Food Policy Institute warned of long-term food price increases. Moreover, higher energy prices raise the cost of storing and cooking food — hitting the poorest households hardest. Furthermore, fertiliser shortages mean this year’s missed planting season translates into food shortages in 2027 — not just price spikes. As a result, the food crisis is not a near-term risk. It is already being planted — or not planted — in fields across South Asia, Africa, and Latin America right now.
The Countries Suffering Most Right Now
| Country/Region | Primary Impact | Government Response | Severity |
| Philippines | Energy emergency — fuel rationing | Declared state of national emergency — 4-day work week | Critical |
| Thailand | Fuel and electricity costs surging | Public workers banned from using elevators — stairs only | Serious |
| Pakistan | 99% LNG from Qatar/UAE — supply collapsed | Emergency appeals to Saudi Arabia — single shipments arranged | Critical |
| Bangladesh | 72% LNG exposure — power cuts severe | Rolling blackouts — industrial production cut | Critical |
| Zimbabwe | Fuel shortages — economy paralysed | Rationing — long queues at stations | Critical |
| Vietnam | Fuel disruption — manufacturing affected | Emergency LNG procurement — spot market | Serious |
| Nigeria | Fuel imports disrupted — inflation surging | Subsidy costs exploding | Serious |
| India | 85% crude oil imported — 53% LNG at risk | Rationing cooking gas — strategic reserves activated | Moderate to serious |
| Japan | 87% energy imported — 95% crude from Middle East | Refiners asked government to release stockpiles | Serious |
| Germany/Italy | LNG from Qatar — industrial surcharges 30% | ECB postponed rate cuts — recession risk | Serious |
| UK | Worst hit major economy per Wikipedia analysis | Gilts market stressed — inflation forecast above 5% | Serious |
“Poorer countries will be hit hardest and face the biggest energy shortages because they will be outbid when competing for the remaining oil and natural gas,” said Lutz Kilian, director of the Center for Energy and the Economy at the Federal Reserve Bank of Dallas. Moreover, the IEA’s coordinated 400 million barrel reserve release covers only a few days of the supply gap. Furthermore, as Kilian noted, wealthy nations simply outbid developing ones for available supply — meaning the crisis redistributes pain rather than eliminating it. As a result, the humanitarian consequences of the Iran war’s energy crisis fall disproportionately on the world’s most vulnerable populations.
The Financial Markets: Insider Trading and Bond Stress
Beyond energy and food, the Iran war created significant financial market turbulence. The UK gilts market — bonds issued by the British government — suffered its worst sell-off of the war on March 27.
Ten-year bond yields jumped to 4.46% — the highest since July 2025. The 30-year mortgage rate climbed to 6.38% on March 26. Moreover, a Financial Times investigation found that $580 million in bets on falling oil prices were placed just 15 minutes before Trump posted his statement on March 23 about pausing Iran energy plant strikes — causing oil to fall. Furthermore, the investigation triggered calls for a formal inquiry into possible insider trading. As a result, the financial system itself now shows signs of stress that go beyond normal market volatility.
The Expert Consensus: Crisis Comparisons
- IEA Director Fatih Birol: “The greatest global energy security challenge in history.” Stated March 23. No qualifier. No hedging.
- MIT economist Christopher Knittel: “The ramifications of this war are going to be long-lived.” Specifically cited infrastructure destruction as the factor that separates this crisis from previous oil shocks.
- Former IMF Chief Economist Gita Gopinath: Global growth — expected at 3.3% before the war — will be 0.3-0.4 percentage points lower if oil averages just $85 a barrel for the year.
- World Food Programme: 45 million more people face acute food insecurity if the conflict does not end soon.
- Chatham House: A severe scenario with oil at $130 would push the eurozone into contraction in Q2 and keep it flat through year-end. The US would face a significant growth slowdown.
- ECB: Postponed planned interest rate cuts on March 19. Raised its inflation forecast. Cut GDP growth projections. Warned of stagflation in energy-dependent economies.
The Infrastructure Damage: Why This Is Different
Every previous oil shock ended when the political conditions changed. The 1973 embargo ended when Arab states lifted it. The 1979 crisis eased when Iran resumed exports. In each case, the physical infrastructure was intact and could quickly resume production.
This crisis is different. Qatar’s Ras Laffan facility suffered direct missile strikes. Repair timeline: 3-5 years. Kuwait’s Mina Al-Ahmadi and Mina Abdullah refineries caught fire. Iran’s own South Pars gas field took Israeli strikes. The UAE shut the Habshan gas plant. Saudi Aramco shut refineries as precaution. Moreover, Knittel identified this structural difference as critical: “Infrastructure actually being destroyed.” Furthermore, even a ceasefire tomorrow does not restore 3-5 years of Qatari LNG capacity. As a result, part of this crisis is permanent regardless of when the war ends.
What Comes After: Three Economic Scenarios
| Scenario | Probability | Global GDP Impact | Energy Price Outlook | Food Security |
| Quick ceasefire — Hormuz reopens within weeks | 25% | Minimal — 0.1-0.3pp growth reduction | Oil falls to $70-80 rapidly | Recovers — if fertiliser planting not missed |
| War continues 3-4 months — Hormuz partially open | 45% | Moderate — 0.4-0.6pp reduction — eurozone recession Q2 | Oil stays $90-120 — gas elevated | Serious — spring planting season partly missed |
| War extends through summer or escalates | 30% | Severe — comparable to COVID in some regions — stagflation | Oil $130-150+ — historical crisis territory | Catastrophic — 45M+ acute food insecurity confirmed |
For a full analysis of what US recession risk looks like under each scenario — including the Goldman Sachs, Moody’s, and EY-Parthenon forecasts — read: US Economy After the Iran War: Recession, Inflation and What Comes Next.
Conclusion
The Iran war is the biggest global crisis since COVID. The IEA says so. The WFP says so. MIT, Chatham House, Goldman Sachs, and the ECB say so — in different words, with different caveats, but pointing in the same direction.
COVID destroyed demand. The Iran war destroys supply. COVID had vaccines. This crisis has no equivalent endpoint. COVID hit every country simultaneously and visibly. This crisis hits developing countries first and hardest — in ways that receive far less coverage than the oil price ticker on financial news screens. Moreover, the infrastructure damage at Qatar’s Ras Laffan will last 3-5 years. The fertiliser shortage will affect harvests into 2027. The 45 million people the WFP warned about will not be fine when a ceasefire is announced.
Furthermore, the question “is this the biggest crisis since COVID?” may already be the wrong question. The right question is: how much worse does it get before it gets better? The IEA gave the answer on March 23. “No country will be immune.” As a result, the world is not watching a regional conflict with global consequences. It is living through a global crisis with a regional origin — and the gap between those two descriptions is the difference between a manageable shock and a lasting transformation of the global economy.
Frequently Asked Questions (FAQs)
Q1: Why do experts compare the Iran war to COVID in economic terms?
Both crises caused immediate, simultaneous, global economic disruption. COVID destroyed demand — factories shut, travel stopped, spending collapsed. The Iran war destroyed supply — oil stopped flowing, LNG stopped shipping, fertiliser plants halted. Moreover, both disrupted global supply chains at their most vulnerable points. Furthermore, the IEA specifically called the Iran war’s energy impact the largest supply disruption in history — including the 1973 oil embargo. As a result, the comparison is grounded in scale and structural similarity, not in the political or human dimensions of the events.
Q2: Why will food prices rise because of the Iran war?
Because fertiliser and energy are the two primary inputs to food production — and both are disrupted. The Persian Gulf provides one-third of the world’s traded urea and one-quarter of its ammonia. Up to 40% of global nitrogen fertiliser exports pass through the Strait of Hormuz. QatarEnergy halted production at the world’s largest urea plant. Moreover, higher energy prices raise the cost of farming, storing, and transporting food at every stage of the supply chain. Furthermore, a missed spring planting season due to fertiliser shortages translates into food shortages in 2027. As a result, the food crisis is not simply a price story — it is a production story with lasting consequences.
Q3: Which countries are suffering the most from this crisis?
Developing countries with high energy import dependence are suffering most. The Philippines declared a national emergency and cut government working days to four per week. Pakistan and Bangladesh face critical LNG shortages — with 99% and 72% of their LNG respectively sourced from Qatar and the UAE. Zimbabwe and Nigeria face severe fuel disruption. Moreover, Japan and South Korea — with 87% and 68% crude oil via Hormuz respectively — burn through strategic reserves. Furthermore, the IEA’s Lutz Kilian explained why: wealthy nations outbid developing ones for remaining supply. As a result, the crisis redistributes pain downward in the global income distribution.
Q4: Is this crisis worse than the 1970s oil shocks?
In volume terms, yes. The 1973 Arab embargo cut global oil supply by approximately 5 million barrels per day. The current Hormuz disruption removed 8-10 million barrels per day from effective supply — a larger absolute volume. Moreover, the IEA explicitly classified this as the largest supply disruption in the history of the global oil market. Furthermore, the infrastructure destruction at Qatar’s Ras Laffan — with a 3-5 year repair timeline — has no equivalent in the 1970s shocks. As a result, the Iran war exceeds the 1970s in supply volume disrupted and in the permanence of some of its damage.
Q5: What would it take for this crisis to end?
Three things need to happen simultaneously. First, a credible ceasefire between the US, Israel, and Iran — one that markets believe will hold. Second, Iran must reopen the Strait of Hormuz to all commercial traffic — not just friendly vessels. Third, insurance companies must restore war-risk coverage for Gulf transit. Moreover, each of these requires the other two to happen first — creating a chicken-and-egg problem. Furthermore, even after all three occur, Qatar’s LNG damage persists for years, the fertiliser planting window cannot be recovered for this season, and confidence in Gulf energy security will take time to rebuild. As a result, ending the war ends the acute phase of the crisis — but does not undo the structural damage already done.
