IEA chief sees little chance of oil market ‘normalisation’ next year

The head of the International Energy Agency said on Tuesday (October 20, 2026) that he saw little chance of a return to normal oil market conditions next year, as the ongoing West Asia war keeps prices high.

“I personally don’t see any credible pathway that 2027 will be a year of normalisation” after the Gulf supply disruptions caused by the U.S. and Israeli attacks on Iran last February, Fatih Birol told a conference organised by The Financial Times.

The war sparked by the attacks has sent oil prices to over $100 a barrel compared with below $70 a barrel before hostilities began, while damage to Gulf refineries has helped push diesel prices to record highs.

In response, the IEA has organised the release of up to 400 million barrels of oil in strategic reserves held by member countries, and Mr. Birol said further releases could be made if warranted.

Iran has vowed to take control of tanker shipments through the Strait of Hormuz, which has driven up transport insurance costs even though flows have reportedly returned to prewar levels in recent weeks.

“If there’s an overlapping crisis in the West Asia, I cannot exclude that our governments will look at the other options,” Mr.Birol told the FT’s Energy Transition conference.

“It’s a big thing, 400 million barrels, but it’s only 20% of the oil we have — 80% is in the pocket,” he said.

Mr. Birol also lamented that the West Asia war had shifted attention away from the risks of climate change, despite confirmation from scientists that the burning of fossil fuels is a clear cause of global warming.

“Climate change is sliding down in the international policy agenda despite the number, the frequency, and the intensity of extreme weather,” he said.

“In a normal world… there’d be more interest, but it is going down,” he said.