International Energy Agency head: ‘Too optimistic’ to say the worst of price increases is over

It would likely be “too optimistic” to assume energy prices have hit their peak amid the ongoing conflict in Ukraine, the executive director of the International Energy Agency said Monday.

“I think [whether] the worst is over or not will be depending on A, what will be the next steps of Russia continuing with the aggression or not, politically and also in the energy sector,” Fatih Birol told The Washington Post’s Heather Long on Monday.

“Russia is not [just] any country when it comes to energy. Russia is today the top oil exporter of the world and the top natural gas exporter of the world, and as such, the aggression of Russia and the decision taken by the international community to ban or reduce the Russian energy imports do have major implications for the energy balances,” he added. “And I think it would be too optimistic to say that the worst is over where we stand today.”

However, Birol also expressed hope that world powers could eventually emerge from the crisis with a more innovative energy strategy, noting that “when you look at the countries … they responded to the 1970s [gas crisis] with more innovation in the energy technologies, ranging from nuclear power becoming a part of the global energy scene to pushing the energy efficiency, car efficiency, fuel efficiency.”

“So I am also hopeful that at the end of this crisis, the first global energy crisis, countries not just states — Europe, Japan, emerging countries — will come up with new energy policies accelerating the clean energy transition,” he said. “As such, it can be a historical turning point in global energy policymaking.”

Birol noted that demand for oil is likely to surge in the months ahead as more people drive, leaving policymakers with a few options to get more on the market. “We may hope to see an even stronger increase [in supplies] from Canada, from Brazil and hopefully, from some OPEC countries, from, I imagine, Saudi [Arabia] and [the United Arab] Emirates,” he said.

The U.S. last week announced a ban on Russian oil imports, which President Biden warned will likely lead to a further increase in gas prices, which recently hit an all-time average high.