Global energy markets are unlikely to return to pre-war conditions in 2027 as the conflict involving Iran continues to disrupt supplies, drive up oil and refined-product prices, and intensify concerns over winter fuel availability, International Energy Agency (IEA) Executive Director Fatih Birol said.

Speaking at the Singapore International Energy Week conference, Birol said there was no credible path for markets to return to their pre-war state next year, urging governments and businesses to make energy security their top priority, according to Reuters.

The conflict, which began in late February, has tightened a global oil market that had been expected to record a surplus in 2026, disrupting energy flows and putting additional pressure on crude oil and refined-product supplies.

Brent crude futures reached $117 per barrel on Friday, October 23, their highest level in nearly six months, following continued Houthi attacks on Saudi Arabia, according to Reuters. Prices retreated on Monday but remained approximately 59% above their pre-war level.

“Oil prices are flirting with $120 a barrel, and the prices for products are even much ​higher,” Birol said, declining to provide a forecast for crude prices. He warned that prices at these levels could significantly widen trade deficits in many countries, even if some economies, including those in Europe, could absorb the increase more easily than others.

Birol also warned that disruptions to refined-product supplies could intensify as the Northern Hemisphere enters winter, particularly for diesel and gasoil used for heating.

Several refineries are undergoing maintenance ahead of the seasonal increase in diesel demand, adding pressure to markets already affected by supply disruptions.

The IEA‘s October 2026 Oil Market Report similarly warned that tight global gasoil markets could persist into 2027. Reduced exports from the Middle East and Russia have depleted inventories ahead of winter, while the agency expects gasoil supply to fall short of demand in the fourth quarter (Q4) of 2026. It said the replenishment of inventories beyond normal seasonal fluctuations was unlikely before the second half (H2) of 2027.

European gas markets face additional pressure as countries reduce Russian gas imports while Qatar and the United Arab Emirates remain unable to export gas at previous levels because of the conflict, Birol said. These disruptions could compound the challenges facing European energy supplies during winter.

Birol also predicted a strong revival in the nuclear power sector as countries seek to strengthen energy security amid prolonged supply disruptions.

He said the IEA’s latest survey showed that nuclear power plants with a combined capacity of 90 gigawatts (GW) were under construction worldwide, the highest level in 40 years.

The IEA’s Global Energy Review 2026, published earlier this year, reported that 78 GW of nuclear capacity was under construction across 15 countries as of March 2026, one of the highest levels recorded in three decades. The report identified Egypt, India, and Türkiye among emerging market economies with around 5 GW of nuclear capacity under construction each.

The latest figures cited by Birol reflect a broader push to diversify energy supplies and strengthen the resilience of power systems as geopolitical disruptions expose vulnerabilities in global fuel markets.