IEA warns global energy markets may not return to pre-war levels in 2027

The International Energy Agency (IEA) has warned that global energy markets may not return to conditions seen before the Iran war in 2027. The conflict, which began in late February, is still disrupting oil and gas supplies and pushing energy prices higher worldwide.

IEA Executive Director Fatih Birol spoke on Monday, October 26, 2026, at the Singapore International Energy Week conference. He said he saw no credible pathway back to pre-war market conditions next year.

Brent crude stays elevated

Global oil prices have risen sharply since the Iran war broke out. Renewed Houthi attacks in Saudi Arabia pushed Brent crude futures to $117 per barrel on Friday, the highest in nearly six months. Prices moderated on Monday but Brent remained about 59% above its pre-war level, reflecting sustained supply disruptions.

“I am afraid I don’t see any credible pathway that the markets will go next year, where we were before this war has started,” Birol said. He warned governments and businesses to make energy security a central priority while considering the future direction of their energy systems.

“So therefore, we all need to get prepared, taking the energy security as a number one priority in our government, business world, but without forgetting what is the next chapter for the countries and for companies that are all here today,” he added.

Nuclear investment rises

Birol also projected a resurgence in nuclear energy investment. An IEA survey identified 90 gigawatts of nuclear power capacity currently under construction globally. That is the highest level recorded in four decades.

Nigeria energy inflation doubles

The sustained rise in global oil prices is putting pressure on economies that depend on imported petroleum products. Higher energy costs widen trade deficits and increase import expenditure.

In Nigeria, energy inflation more than doubled to 10.85% in September 2026, compared with 4.69% in August. The National Bureau of Statistics (NBS) said the annual energy inflation rate increased by 6.16 percentage points between August and September, a 131.34% rise.

Nigeria’s headline inflation moderated to 14.63% in September from 15.39% in August, despite the sharp increase in energy inflation. The gap between energy inflation and broader consumer price movements highlights the pressure from rising energy costs even as overall inflation eased.

Governments respond with supply measures

Governments and major energy-consuming economies have introduced measures to increase petroleum supplies and ease price pressures after disruptions caused by the Iran war.

On October 22, a tanker carrying 40,000 metric tonnes of Russian diesel was loaded at the Baltic port of Primorsk for shipment to New York under an agreement between Russia and the United States. The agreement followed Russia’s decision to lift its self-imposed diesel export ban on October 9, allowing additional shipments to international markets.

Earlier, on October 2, the Group of Seven (G7) countries agreed to release 100 million barrels of crude oil and diesel from emergency reserves over four months, including accelerated diesel releases during the first 20 days.

In Nigeria, the Federal Government announced a 30-day petrol discount through Nigerian National Petroleum Company (NNPC) Limited retail outlets, prioritising commercial transport operators. Under the arrangement, NNPC agreed to waive its retail profit margin and sell petrol at cost. The government also began negotiating a N1,350-per-litre ceiling on the landing or ex-gantry cost of petrol to limit price volatility.

The measures are intended to ease supply shortages and reduce the impact of rising fuel prices on households, businesses and economies facing increasing energy costs.

For Nigeria, the story points to continued pressure from imported energy costs. The September data shows energy inflation running well ahead of headline inflation, a burden for consumers and businesses already managing fuel prices.