The damage, in Fatih Birol’s view, is already visible: the latest energy crisis has altered how governments think about fuel security, and the shift may not reverse. The executive director of the International Energy Agency says the Iran war has permanently changed expectations around oil, pushing countries to question fossil fuels and rethink the risks built into their energy systems.
What is the central question now?
The central question is not whether the crisis disrupted supply. It is whether it has permanently damaged confidence in fossil fuels as a reliable foundation for national energy policy. Birol, described as the world’s leading energy economist, said the answer is yes. In his assessment, governments will review their energy strategies, and the result will be a significant boost to renewables and nuclear power, along with a further shift toward a more electrified future.
Verified fact: Birol said the “perception of risk and reliability will change, ” and that this will cut into the main markets for oil. He also said the crisis has created “permanent consequences for the global energy markets for years to come. ”
Why does the IEA chief think the damage is permanent?
Birol’s argument rests on confidence, not just price. In his view, the crisis has made countries less willing to rely on fossil fuels to secure energy supplies. He said there is no going back from the damage, comparing the situation to a broken vase that is very difficult to put back together. That is a sharp statement, but it is also a policy warning: when governments believe supply can be interrupted at any time, they begin to diversify away from the fuels most exposed to geopolitical risk.
He also said the crisis will not only affect oil. Impacts on fertiliser, food, helium, software, and other industries will continue even if the Strait of Hormuz reopens. That broad spillover matters because it shows the shock is not being measured only in barrels. It is being felt across sectors that depend on stable energy flows.
What does this mean for energy policy in the UK?
Birol’s comments on the UK were unusually direct. He said much of the proposed North Sea expansion should be forgone, even though the oil industry and its allies have pushed for more drilling, including the Jackdaw and Rosebank fields, which have exploration licences but not production permits. His view was that these fields would not change much for the UK’s energy security, would not alter oil and gas prices, and would not make any significant difference to the crisis.
He added that further exploration licences would not bring significant quantities of oil and gas for many years, would not lower bills, and would leave the UK as a significant importer and price taker on international markets. He said, on a business basis alone, major investment in exploration might not make sense. Tiebacks, where existing oilfields are extended, were treated differently in his remarks and should go ahead.
Who benefits, and who faces the pressure?
In Birol’s framing, the winners are not necessarily the usual fossil fuel players. The crisis creates an opening for renewable energy and nuclear power, which he described as “no-regrets” options. He also said solar is competitive with coal on cost and growing faster. That combination makes the policy direction clearer: countries worried about supply shocks may see renewables as a safer long-term bet than new fossil fuel development.
At the same time, the immediate market still looks tight. Birol said the situation is “bigger than all the biggest crises combined, ” while another market signal in the context shows Brent trading above $105 a barrel and physical supply still constrained. Those conditions can keep pressure on governments to react quickly, but his point is that short-term scarcity does not erase the longer-term shift in confidence.
What should the public take from this energy warning?
Analysis: The deeper message is that the crisis may have changed the politics of energy more than the economics of any single field. If governments now believe fossil fuel supply is more vulnerable, they may move faster on renewables, nuclear power, and electrification even while prices remain high. That creates a split between short-term market stress and long-term planning.
Birol also said it is too early in this crisis to impose new levies, even though he supported windfall taxes during the Ukraine crisis. That restraint suggests the IEA chief sees the current shock as still unfolding, with its policy consequences not yet fully settled. But his core judgment is clear: the damage to trust has already been done, and the result will reshape energy choices for years.
The accountability question now is whether governments will treat this as a temporary supply scare or as a durable warning about fossil fuel dependence. Based on Birol’s assessment, delaying that debate would be a mistake. The public deserves transparent energy planning that reflects the new risk landscape, not a return to assumptions that this energy crisis has already overturned. In that sense, energy is no longer just a market issue; it is a test of whether governments have understood what has changed.
