Fatih Birol warns geopolitical pressures increasing 'by the day' challenge energy security

The National

25-04-2025

The Executive Director of the IEA Fatih Birol has called for the need to work collaboratively to ensure energy security at a time of two major risks, the first is the traditional challenge to oil and gas energy supplies and the second, more recent, securing critical minerals supplies. In an interview with The National, Mr Birol highlighted the need to 'find common ground between countries', at a time when 'the geopolitical fragmentation is really increasing'. The issue of geopolitical tensions is top of mind for Mr Birol who stressed that 'the winds are blowing not in the direction of international cooperation but fragmentation'. He warned that 'no country is an energy island… a country alone cannot solve this energy problem'. While he did not name any particular country responsible for that fragmentation, US administration policies and the threat of trade wars are impacting oil prices globally. Mr Birol hosted a two day Summit for the Future of Energy Security with the UK government which concluded on Friday afternoon. Speaking to The National on the second day of the Summit, Mr Birol said that the convening of the Summit itself was a 'big success', with 60 countries from five continents and major oil companies including Exxonmobil, ADNOC and Shell present. He adds among the countries represented ' we have about 15 oil exporters, major renewable producers, major critical minerals owners, copper, lithium, zinc". The attendees list had obvious ommisions, including China. Commenting on China's absence, Mr Birol said 'it was a scheduling conflict.. I will meet them in a few days'. The energy industry is pivoting more towards fossil fuels since the election of Donald Trump as President of the United States. However, declaring new tariffs on numerous countries has also led to uncertainty about the global economy. On the volatility of oil prices, Mr Birol expects lower oil prices to continue to fall. He said 'oil prices may see further downward pressure because of the uncertainty of trade wars'. If the current trajectory remains as it is, he expects 'global oil demand will be impacted in a negative way'. He explained that 'uncertain global economy and the trade wars are making economic outlook much more uncertain and weak' Mr Birol also added that 'oil and gas will be with us for years to come'. Immediate risks include risks to supplies through the Red Sea under threat from potential attacks from the Houthi Rebels Maybe military solutions to open trade routes. On how to handle those threats, Mr Birol said there are 'mechanisms which can in limited ways address some shortfalls.. but (ultimately) needs structured solutions, maybe military solutions, to open up these trade routes'. Mr Birol also also sees that economic realities mean that renewables are now a powerful force. 'A lot of solar and wind coming to market', not necessarily because of climate action rather due to economic dynamics. 'They are cheap', Mr Birol said succinctly. He adds 'it is coming from China, in the Middle East, in Asia, in Latin America, in Europe'. He highlighted that of all the power plants installed in the world, 85% were renewables, explaining 'this is mainly because of the economics.. renewables are no more a romantic story, it is an economic reality'. Yet, electrification and renewables are also facing security threats, with a concentration of renewables in a few countries. The IEA is being careful not to come across as targeting one country or another when raising the issue of critical minerals risk, as Mr Birol said the issue is one of supply chains, which can face technical or natural disaster threats, in addition to geopolitical ones. In the Summit, Mr Birol said 'we agreed that it may be not a good idea to put all the eggs in one basket... Diversification is important'. He added those convened in London agreed that ' the future of the energy security will critically hinge on not only paying attention to traditional security risks such as oil and gas, but also and critical minerals mining and manufacturing'. That will include initiatives between the countries who have critical mineral resources in Latin America, in Africa and others, and countries willing to invest in and develop mines and the refining and processing facilities in those countries.