IEA Birol Warns Of No “Credible Pathway” Back To Pre-War Energy Markets In 2027

IEA Executive Director Fatih Birol told the Singapore International Energy Week conference on Monday that global energy markets won’t return to pre-war conditions in 2027 and that prolonged supply disruptions, especially of refined products such as diesel and jet fuel, will keep pressure on economies and threaten fuel availability heading into the Northern Hemisphere winter.

Great to be back in Singapore for #SIEW2026. Southeast Asia has been on the front line of today’s energy crisis, but it can also be at the forefront of the solution. By building on a strong foundation of trust and cooperation, the region can write a new chapter in energy security.

— Fatih Birol (@fbirol) October 26, 2026

“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,” Birol told the conference, who Reuters quoted. 

“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,” he said.

Brent crude reached $117 a barrel Friday but, by Monday morning, was retracing last week’s 6% rally as renewed diplomatic efforts provided some hope of de-escalation in the Gulf area. Brent is trading around $114 a barrel, although the growing risk of another round of US-Iran conflict could send crude much higher.

“Oil prices are flirting with $120 a barrel and the prices for products are even much higher,” Birol said. He declined to forecast crude prices but warned that current levels were widening trade deficits and placing significant economic pressure on many countries.

Birol continued, “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.”

“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,” he added.

Birol’s warning on Monday follows a recent IEA report stating that the “gasoil market balance will remain tight well into 2027 and is dependent on a recovery of product supply from the Middle East. Failing this, further demand reductions and the heavy economic costs these will entail may be needed to balance markets.“

Goldman energy analyst Nikhil Bhandari warned last month that a deepening refining crisis could extend pain at the pump for diesel and gasoline well into 2027.

In a separate note in September, Bank of America analysts said that a prolonged disruption in the Strait of Hormuz could send oil prices to $150 a barrel.

Beyond crude, Goldman’s Daan Struyven warned last week that European natural gas prices could soar to 150 euros per megawatt-hour if Gulf disruptions persist. Prices are currently trading around 96 euros per megawatt-hour, their highest level since 2022.