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

Fatih Birol, Executive Director of the International Energy Agency, said energy markets will not return to pre-Iran war levels by 2027, noting that the conflict, which began in late February, has caused a significant supply shortage in a market that was expected to see a surplus this year. This has disrupted global energy flows and driven up prices for oil and refined products.

Speaking at the International Energy Week conference in Singapore, as reported by Reuters, Birol said he does not see a reliable path for markets to return to previous conditions next year. He called on governments and businesses to prioritize energy security and prepare for the next phase for countries and companies.

He pointed out that ongoing attacks by Yemen's Houthi group on Saudi Arabia have contributed to Brent crude futures rising to $117 a barrel on Friday, the highest level in about six months. Although prices eased on Monday, they remain around 59% higher than before the war.

At a press conference, Birol said oil prices are nearing $120 a barrel, with refined product prices even higher. He declined to make price forecasts but noted that the current price may be manageable for some countries, such as those in Europe, while placing significant pressure on trade deficits elsewhere in the world.

Birol expressed concern about winter demand for certain fuels, especially diesel used for heating in the West, explaining that refinery maintenance in some regions is adding to worries as winter approaches.

He added that Europe faces a harsh winter due to reduced gas imports from Russia, and with new challenges from the Iran war—such as decreased export capacity from Qatar and the UAE—pressure on gas markets will intensify.

Birol predicted a "strong comeback" for the nuclear sector as a result of the current crisis, noting that the latest IEA survey shows 90 gigawatts of nuclear power plants under construction, the highest figure in forty years.