IEA Birol, the agency’s executive director, said on Monday he does not expect energy markets in 2027 to return to where they were before the Iran war. “I don’t see any credible pathway,” Fatih Birol told Singapore International Energy Week.
What IEA Birol warned about
Before the war, the market had been heading for a surplus this year. Instead, the conflict tightened supply and pushed up crude and fuel prices. Brent rose as high as $117 on Friday. Even after easing on Monday, it was still about 59% above its pre-war level.
Birol said oil prices were “flirting with $120 a barrel”. Although he gave no forecast, he said such prices hurt the trade deficits of many importers.
Winter risks
In addition, he fears for diesel this winter, as demand rises and several refineries enter maintenance. Europe also faces a tough winter for gas, because Qatar and the UAE cannot export as before.
On the other hand, he expects a “strong comeback” for nuclear. In fact, 90 GW of reactors are under construction, the most in four decades.
For India, high prices weigh on the import bill. Read our report on India’s crude import bill.
For a deeper analysis, read: The Oil Price Shock Is Not Going Away: Brent ~59% Above Pre-War and What It Costs India
