U.S. Threatens IEA Withdrawal Over ‘Politicized' Energy Forecasts

Forbes

16-07-2025

Energy Secretary Chris Wright speaks with reporters at the White House, Wednesday, Feb. 26, 2025, in ... More Washington. (AP Photo/Alex Brandon)
In a July 15 interview with Bloomberg, U.S. Energy Secretary Chris Wright said he has told Fatih Birol, head of the International Energy Agency (IEA), his agency must either reform its forecasting methods or face potential U.S. withdrawal from the organization. This development reflects growing tensions between the Trump administration's energy priorities and the IEA's focus on clean energy transitions.
Wright's criticism centers on the IEA's reports and projections, which he and other critics of the agency argue are overly optimistic about renewable energy adoption and fail to adequately prioritize energy security. The debate underscores a broader ideological divide between the U.S. administration and many other western governments over global energy policy and could impact international cooperation and domestic energy strategies.
The IEA, established in 1974 to enhance energy security following the first Arab oil embargoes, evolved into a key provider of reliable data and forecasts for industrialized nations to use to help guide energy policy. In recent years, its long-term projections have increasingly incorporated ambitious government policies aimed at transitioning away from fossil fuels, predicting a peak in global oil demand by 2029. This shift in methodology has drawn criticism contending that the agency's forecasts are not reflective of current energy realities, particularly the continued global demand for oil and gas.
LONDON, ENGLAND - APRIL 24: Executive Director of the International Energy Agency (IEA) Fatih Birol ... More delivers opening remarks during the Future of Energy Security Summit, hosted by the International Energy Agency and UK Government at Lancaster House on April 24, 2025 in London, England. This Summit examines the geopolitical, technological and economic factors affecting energy security at a national and international level. (Photo by Justin Tallis -)
Wright Urges IEA To Put Data Over Ambitions
Wright laid out the U.S. position in the Bloomberg interview, stating, 'We will do one of two things: we will reform the way the IEA operates, or we will withdraw.' He expressed a preference for the latter, saying, 'My strong preference is to reform it,' in hopes his discussions with Birol and others can influence a return to the more balanced approach which formerly characterized IEA's modeling approach.
Wright's concerns center on the IEA's reliance on models like the Stated Policies Scenario (STEPS), which assumes governments will implement their clean energy commitments fully and on time. He argues this approach underestimates fossil fuel demand, as evidenced by the IEA's forecast of global oil demand growth at just 700,000 bpd in 2025, the slowest since 2009 outside the COVID-19 period.
Wright's comments are consistent with the Trump administration's broader energy agenda, which prioritizes maximizing domestic oil and gas production to bolster energy security and economic growth, and seem likely to slow the growth of alternatives like wind and solar generation and electric vehicles. He contends that the IEA's green-leaning forecasts risk misleading policymakers by downplaying the vital, ongoing role of fossil fuels, which remain critical to meeting global energy needs.
As an example, the IEA's Oil 2025 report projects a plateau in oil demand by 2029, driven by electric vehicle adoption and behavioral shifts, a view that contrasts sharply with OPEC's forecast of sustained demand growth through 2050. Wright argues that such discrepancies undermine the IEA's credibility, particularly when its projections influence investment and policy decisions.
The Energy Secretary's push for reform includes a call for the IEA to reinstate forecasting models like the Current Policies Scenario (CPS), which focuses on existing policies and energy security without assuming aggressive climate action. 'The agency has predicted that global oil demand will peak in 2029, before the world's energy consumption peaks in 2030, as a result of energy and climate proposals,' Wright noted, disputing the IEA's optimism about the pace of the energy transition, which many experts say has fallen far behind the pace needed to sustain IEA's optimistic view.
He believes the CPS would provide a more realistic baseline, aligning with the U.S. view that fossil fuels will remain indispensable for decades.
Wright's IEA Criticism Is Consistent With Trump Energy Policies
It would likely be naive to assume that Wright's threat of withdrawal is mere talk. In fact, it is entirely consistent with the overall Trump energy policies, as well as the clear shift in U.S. engagement with international energy institutions over the last 6 months.
While a move by the U.S. to cancel its contributions to IEA - currently 18% of its overall budget - might risk isolating the U.S. from the prevailing global direction of climate change-related policies, it seems doubtful either Wright or President Donald Trump would regard that as a major concern. The administration has already moved aggressively to stake out a position which diverges from that consensus, which drove the Biden administration's efforts to force the desired energy transition to alternative forms of energy.
There also seems to be little reason to believe pressure from international organizations might derail Wright's objectives related to the IEA. The U.S. has its own authoritative agency which analyzes energy markets, the Energy Information Administration, which is housed at Wright's own Department of Energy. To a large extent, the IEA is, for the United States, an expensive redundancy whose inputs would be little missed should Wright's discussions with Birol fail to produce the desired reforms.
The IEA At A Crossroads
Wright previously criticized IEA's forecasts in late June, calling the agency's projection of peak oil demand by 2029 'nonsensical,' and saying its methodologies have become 'politicized.' In response, a spokesperson for IEA said, 'The IEA welcomes feedback on our work and attaches great importance to our dialogue with the Department of Energy and other branches of the US Government."
Wright's latest remarks place Birol and the IEA at a troubling, complex crossroads with no apparent easy solution. Reforming its forecasting to emphasize energy security with a return to previous modeling methods might satisfy the U.S. but could alienate IEA members who remain committed to the prevailing global energy transition narrative. On the other hand, maintaining its current trajectory could lead to a U.S. exit, a deep cut to IEA's budget undermining the agency's global influence.
As Wright stated, 'We're not trying to dictate to the world, but we're not going to be part of an organization that's not grounded in reality.' The central argument in which Birol and IEA find themselves caught in the middle, of course, is what that 'reality' really is. Opinions about that vary wildly, and the outcome of this dispute will say much about how the struggling energy transition will evolve into the future. Stay tuned.