Key Takeaways
- IEA Executive Director Fatih Birol expects energy markets to remain high in 2027.
- Brent crude futures are trading at nearly 60% above pre-war levels.
- Winter demand for diesel and gas is a concern due to ongoing conflicts.
The head of the International Energy Agency (IEA), Fatih Birol, has warned that energy markets are unlikely to return to pre-war levels by 2027, following the Iran conflict that began in late February.
Speaking at the Singapore International Energy Week conference, Birol stated, 'I am afraid I don’t see any credible pathway that the markets will go next year, where we were before this war has started.'
The conflict has significantly disrupted global energy flows, pushing up oil benchmarks and refined product prices. Brent crude futures have reached their highest level in nearly six months, trading at $117 a barrel, and are currently around 59% above their pre-war levels.
Birol highlighted that oil prices are not affordable for some countries, particularly in Europe, where they are only 'maybe not so high and affordable.' However, in many parts of the world, the current oil prices are having a major impact on trade deficits.
The IEA chief also raised concerns about winter demand for refined products, especially diesel, which is used for heating in parts of the West. He noted, 'I am worried on top of that for refined products because we are entering…winter season. Some parts of the world, where typically diesel demand goes high and several refineries are going through maintenance period.'
Birol further emphasized the impact of the Iran conflict on gas markets, stating, 'In Europe, we are facing a tough winter because European countries have decided to cut gas imports from Russia and with the additional problem now rising from the Iran war, namely Qatar and the Emirates not being able to export gas as they were before, will put significant pressure on gas markets.'
Despite the challenges, Birol expressed optimism about the nuclear sector, predicting a 'strong comeback' due to the current crisis. The IEA’s recent survey showed that 90 gigawatts of nuclear power plants are under construction, the highest in the last four decades.
The IEA’s Executive Director concluded by urging governments and businesses to prioritize energy security, stating, 'So therefore, we all need to get prepared, taking the energy security as a number one priority in our government, business world, but without forgetting what is the next chapter for the countries and for companies that are all here today.'
I am afraid I don’t see any credible pathway that the markets will go next year, where we were before this war has started.
Fatih Birol, IEA Executive Director
I am worried on top of that for refined products because we are entering…winter season. Some parts of the world, where typically diesel demand goes high and several refineries are going through maintenance period.
Fatih Birol, IEA Executive Director
In Europe, we are facing a tough winter because European countries have decided to cut gas imports from Russia and with the additional problem now rising from the Iran war, namely Qatar and the Emirates not being able to export gas as they were before, will put significant pressure on gas markets.
Fatih Birol, IEA Executive Director
