The Reds surrendered a two-goal advantage for the second successive friendly, having also thrown away a 2-0 lead in their 4-2 loss to Leeds United last week.
Alexander Isak and Florian Wirtz put Liverpool in control before Monaco mounted a second-half comeback, with Paris Brunner completing the turnaround with a late header.
For Iraola, the collapse highlighted a clear physical issue within his squad, particularly among the senior players returning to action.
"We played really good in the first half, especially the first 30 minutes, but right now probably we don't have much more in terms of the level required to play like this," Iraola told club media.
"They were much better in the second half and they deserved to turn around the game."
Virgil van Dijk, Alisson Becker and Cody Gakpo were among those making their first appearances of pre-season, and Iraola believes a lack of match fitness ultimately affected Liverpool's ability to maintain their performance.
"The problem is right now probably they don't have the energy for 90 minutes and they start to get tired," he said.
"It will take time with them, we need more training with them. But we can take a lot of positives but also a lot of negatives from today."
The new Liverpool boss has also been forced to manage several fitness concerns during pre-season, particularly in defence.
Joe Gomez and Giovanni Leoni have suffered injury setbacks, while new signing Jeremy Jacquet has also been carefully managed after previously dealing with a shoulder problem and more recent knee trouble.
Iraola opted against including Jacquet against Monaco but expects him to return for the final friendly against Como.
"With Jeremy we decided not to put him in today, but he should be fine for the next game," he said. "He's taking a little bit more time than we expected."
Curtis Jones was another absentee after experiencing an issue with his hip during training.
"Curtis has trained every day but yesterday he had some issues in his hip. It doesn't look like anything big, but it didn't make any sense to risk it," Iraola added.
Liverpool could receive defensive reinforcements, meanwhile, with sources indicating that Barcelona captain Ronald Araujo is set to join the club on loan. The proposed agreement is understood to include an option to make the move permanent for (£47 million pounds).
Araujo can play at centre-back or right-back, potentially providing valuable cover with Liverpool's defensive options stretched.
Liverpool will face Como in their final pre-season fixture before opening their Premier League campaign against Newcastle on August 23.
