Exclusive:
International Energy Agency’s Fatih Birol, the world’s leading energy
economist, also says UK should largely forgo North Sea expansion
Fiona
Harvey Environment editor
Fri 24
Apr 2026 16.00 BST
The oil
crisis triggered by the Iran war has changed the fossil fuel industry for ever,
turning countries away from fossil fuels to secure energy supplies, the world’s
leading energy economist said.
Fatih
Birol, the executive director of the International Energy Agency (IEA), also
said that, despite pressure, the UK should forgo much of its potential North
Sea expansion.
Speaking
exclusively to the Guardian, Birol said a key effect of the US-Israel war on
Iran was that countries would lose trust in fossil fuels and demand for them
would reduce.
“Their
perception of risk and reliability will change. Governments will review their
energy strategies. There will be a significant boost to renewables and nuclear
power and a further shift towards a more electrified future,” he said. “And
this will cut into the main markets for oil.”
Birol
said there was no going back from the crisis: “The vase is broken, the damage
is done – it will be very difficult to put the pieces back together. This will
have permanent consequences for the global energy markets for years to come.”
While
focused on the global picture of shortages and future demand, the IEA chief
also urged caution over the UK’s potential plans. The oil industry and its
allies have called for increased North Sea drilling, including giving the
go-ahead to the Jackdaw and Rosebank fields that have received exploration
licences but not production permits.
Birol
said: “It is up to the government, but these fields would not change much for
the UK’s energy security, nor would they change the price of oil and gas. They
would not make any significant difference to this crisis.”
He also
cautioned against granting exploration licences for further new fields on
commercial grounds.
“They
won’t provide any significant quantities of oil and gas for many years to
come,” Birol said. “They will not lower the bills, the UK will remain a
significant importer and price taker on international markets. I am not even
talking about the climate change effects – just from a business point of view,
making a major investment in exploration might not make business sense.”
Tiebacks,
whereby the range of existing oilfields are extended, were a different matter,
he added – they should go ahead.
In a
wide-ranging interview, Birol said the vastly changed future outlook presented
expanded opportunities for renewable energy but also dangers that could throw
progress on the climate off track. As the longtime head of the global energy
watchdog, he is one of the most influential voices on governments globally.
Birol
also said:
Continuing high fossil-fuel prices could tempt
developing countries to turn to coal, but solar was competitive with coal on
cost and was growing faster.
Renewables offerred a no-regrets alternative
and nuclear power was also likely to be increased. Building renewables was an
option “I never heard that anybody ever regretted”, he said. “I don’t see any
downsides for renewable energy.”
Although he called for windfall taxes during
the Ukraine crisis to skim some of the vast unearned profits of energy
companies, Birol said it was too early in this crisis for new levies.
Impacts on fertiliser, food, helium, software
and other industries would continue even if the strait of Hormuz reopened.
This
crisis was “bigger than all the biggest crises combined, and therefore huge”,
he said. “I still cannot understand that the world was so blind-sided, that the
global economy can be held hostage to a 50km strait.”
Birol’s
views on the North Sea were welcomed within the UK government. Labour came to
power pledging a ban on future exploration licences, but left open the question
of whether fields already in the licensing pipeline – including Jackdaw and
Rosebank – should go ahead. Ministers have come under pressure from the oil and
gas industry, from opposition parties and sections of the media to permit the
fields in the planning process and to rescind the ban on new exploration.
“We are
delighted that the world’s leading energy economist has reiterated his
endorsement of a fair and managed transition in the North Sea,” said a Labour
source.
Experts
and campaigners said the views of the IEA chief should be heeded. Ed Matthew,
the UK director of the thinktank E3G, said: “Birol is simply reflecting what
every sane, independent energy analyst can see. The UK’s fossil fuel reserves
have been depleted by 90% and will do nothing to bring down bills.
He added:
“The only effective path to energy and economic security is homegrown clean
energy. All political parties should now be uniting around that mission. Their
failure to do so tells you a lot about whose interests they truly represent.”
Tessa
Khan, the executive director of the campaigning organisation Uplift, said:
“These facts [that new fields would not lower prices or materially increase
energy security] don’t change, they are just being drowned out by the noise
from the oil lobby, which has seized on this moment to push for more drilling
even as countries rapidly pivot to renewables in response to the conflict.
“Caving
into these demands risks tying the UK to a volatile and increasingly outdated
fossil fuel system, just as the world moves away from it.”
More than
50 governments, including the UK, the EU, big oil producers and scores of
developing countries will meet next week in Colombia for the world’s first ever
international conference on the transition away from fossil fuels, where the
global response to the oil crisis and the push for renewable energy will be
discussed.
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