IEA Chief warns oil market normalization unlikely by 2027

Fatih Birol, Executive Director of the International Energy Agency (IEA), stated that there is no “credible pathway” for the oil market to normalize by 2027. Speaking at an energy transition summit in London, Birol expressed concern regarding overlapping crises in the Middle East and the potential for further escalation in the region.

A significant concern involves the Strait of Hormuz, a critical maritime route for global oil supply. Birol noted that even if traffic through the Strait were to fully recover, the conflict has damaged global confidence in the route's reliability, warning that it “can be closed again.”

To address supply difficulties, the IEA may consider utilizing more strategic reserves. While 400 million barrels have been mobilized since March—representing approximately 20% of available reserves—the agency maintains that 80% of its reserves remain available to mitigate worsening supply shortages.