Business EconomyPosted at: Oct 26 2026 3:20PM


Energy markets unlikely to return to pre-war levels in 2027: IEA

New Delhi, Oct 26 (UNI) Global energy markets may take until beyond 2027 to recover from the disruptions caused by the Iran war, as rising crude oil prices, winter fuel demand and supply constraints add to concerns over energy security, International Energy Agency (IEA) Executive Director Fatih Birol warned on Monday.
Speaking at the Singapore International Energy Week conference, Birol said there was no credible indication that energy markets would return to their pre-war conditions next year. The conflict, which began in late February, has disrupted global energy supplies, derailing earlier expectations of a surplus and pushing up crude oil and refined fuel prices.
He urged governments and businesses to prioritise energy security while preparing for a prolonged period of uncertainty in global energy markets. Birol also stressed the need for countries and companies to plan for the longer-term changes the crisis could bring to the energy sector.
Oil prices have climbed sharply amid escalating tensions in West Asia and concerns over potential disruptions to supplies. Brent crude futures surged to USD 117 per barrel on Friday following further Houthi attacks in Saudi Arabia, marking their highest level in nearly six months. Prices eased to around USD 115 per barrel on Monday but remained approximately 59 per cent above their pre-war levels.
Birol said crude oil prices were approaching USD 120 per barrel, while refined petroleum products were becoming even more expensive. He cautioned that such elevated prices could place significant pressure on economies, particularly those already grappling with large trade deficits.
Although he refrained from forecasting the future trajectory of crude oil prices, the IEA chief highlighted the uneven impact of the surge across countries. While some European economies may be better positioned to absorb higher oil prices, many other nations could face mounting economic challenges.
Beyond crude oil, the availability of refined petroleum products is emerging as another concern as the Northern Hemisphere enters winter. Birol flagged the possibility of tighter diesel supplies as seasonal demand increases in some regions, including areas where the fuel is used for heating.
The pressure could intensify as several refineries prepare for scheduled maintenance, potentially limiting the supply of refined fuels at a time when demand is rising.
The combination of higher consumption and constraints on refining capacity could further increase fuel costs, adding to the strain on economies already dealing with expensive energy imports.
Europe could face a particularly challenging winter as it reduces its dependence on Russian gas while disruptions linked to the Iran war affect supplies from Qatar and the United Arab Emirates.
Birol warned that the combination of reduced Russian gas imports and lower availability of gas exports from the Gulf could place significant pressure on European gas markets.
The developments have heightened concerns over the security and affordability of energy supplies, with countries potentially facing greater competition for available gas cargoes as winter demand rises.
The energy crisis could also accelerate interest in nuclear power as governments seek to diversify energy sources and reduce their exposure to supply disruptions.
Birol expects nuclear energy to make a strong comeback, pointing to the scale of investment in new capacity. According to the IEA's latest survey cited by him, around 90 gigawatts of nuclear power capacity was under construction globally, the highest level in four decades.
The warning underscores how the consequences of the Iran war could extend beyond the immediate conflict, reshaping energy security priorities, fuel markets and investment decisions well into 2027 and beyond.
UNI VK RSA
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