In a moment that has unsettled energy planners from London to capitals far beyond it, the phrase fossil fuel is no longer just shorthand for a market under pressure. It now describes a system that Fatih Birol, executive director of the International Energy Agency, says has been altered for good by the oil crisis triggered by the war in Iran.
Birol, one of the world’s leading energy economists, says the disruption has changed how countries think about supply, reliability, and risk. The result, in his view, is not a brief scare but a long-term reordering of energy strategy.
Why is the Fossil Fuel market changing so sharply?
Birol’s central warning is blunt: the damage is done. He said the crisis has broken confidence in fossil fuel supplies, pushing governments to reassess where their energy comes from and how vulnerable they are when key routes are threatened. In his words, countries will lose trust in fossil fuels, demand will weaken, and the main markets for oil will shrink.
He said the reaction will not stop at oil. Governments, he added, will review their energy strategies, with a significant boost to renewables and nuclear power and a further shift toward a more electrified future. That change, he said, will have permanent consequences for global energy markets for years to come.
What does this mean for the UK and North Sea expansion?
Birol also used the moment to caution the UK against leaning too hard on North Sea expansion. He said fields such as Jackdaw and Rosebank would not change much for the country’s energy security and would not move oil and gas prices in a meaningful way. He said they would not make any significant difference to the crisis.
He went further on exploration licences for new fields, arguing that they would not provide significant quantities of oil and gas for many years. He said the UK would remain a significant importer and price taker on international markets, and that a major investment in exploration might not make business sense even before climate considerations are weighed.
Tiebacks, he said, are different and should go ahead if they extend the reach of existing oilfields. That distinction matters because it shows how the current debate is no longer just about producing more fuel, but about deciding what kind of energy system is worth investing in.
How are renewables and nuclear power part of the response?
Birol said the crisis has created expanded opportunities for renewable energy, even as it carries risks that could slow climate progress. He said continuing high fossil fuel prices could tempt developing countries to turn to coal, yet solar remains competitive with coal on cost and is growing faster.
He described renewables as a no-regrets alternative and said he does not see downsides for renewable energy. Nuclear power, he added, is also likely to increase as countries look for sources they consider more reliable. That shift, in his view, is not just technical. It is political, economic, and psychological, because energy policy now sits closer to national security than at any point in recent memory.
What are the wider human and economic effects?
The consequences go beyond power stations and oilfields. Birol said impacts on fertiliser, food, helium, software, and other industries would continue even if the Strait of Hormuz reopened. That matters because the crisis is not only about barrels of oil; it is about the movement of goods, prices, and daily life.
He said the current disruption is larger than all the biggest crises combined, and that scale affects households as well as governments. Higher fossil fuel prices can feed through to bills, transport costs, and industrial planning, while uncertainty makes companies and states hesitate before committing to long-term investment.
The IEA chief also said it is too early in this crisis for new windfall taxes, even though he had supported such levies during the Ukraine crisis. That caution suggests how unsettled the moment remains: governments are still trying to understand the depth of the shock before deciding how to respond.
In the end, Birol’s message is less about one crisis than about a turning point. The vase is broken, he said, and the pieces will be difficult to put back together. For the fossil fuel era, that may be the clearest sign yet that the old assumptions have already changed.
