IEA chief: Energy markets unlikely to return to pre-Iran war levels by 2027

Fatih Birol, executive director of the International Energy Agency, said on Monday he does not expect energy markets in 2027 to return to the levels seen before the outbreak of war with Iran in late February.

Speaking at the Singapore International Energy Week conference, Birol added: "I am afraid I do not see any realistic path for markets to return next year to the levels before this war began. Therefore, we all need to be prepared, making energy security a top priority for governments and businesses, while not losing sight of the next phase for the countries and companies represented here today."

Birol noted that oil prices are approaching $120 per barrel, while prices for oil products are rising to much higher levels.

The IEA chief declined to provide a forecast for oil prices, but added: "I can say that the current oil price may not be too high and could be manageable for some countries, such as those in Europe. However, prices reaching around $120 per barrel have a significant impact on the trade deficit in many regions of the world."

Birol also expressed concern about winter demand for certain fuels, especially diesel used for heating in some Western countries.

He continued: "I am also concerned about refined oil products, as we are entering the winter season, which is when diesel demand typically rises in some parts of the world, coinciding with several refineries undergoing maintenance."

He added: "Europe faces a difficult winter after European countries decided to reduce imports of Russian gas. With the additional problem caused by the current war with Iran—namely, Qatar and the UAE being unable to export gas at previous levels—gas markets will be under significant pressure. I expect the nuclear energy sector to see a 'strong comeback' as a result of the current crisis."

He pointed out that the latest survey by the International Energy Agency showed nuclear power plants under construction with a total capacity of 90 gigawatts, the highest level in four decades.