Fatih Birol: Warning of a new era and diesel crisis in global energy markets

Fatih Birol, in the opening speech of the "Beyond Climate: Towards Antalya" meeting organized by Oksijen Newspaper under the main sponsorship of COP31 Global Business Partner Koç Holding, said that a new era has entered the global energy markets after the US/Israel-Iran War that started on February 28.

Recalling that he evaluated the "biggest energy crisis" when the war started, Birol said, "Oil prices are currently around 100 dollars. It is quite high. What is important is the prices of refined petroleum products, especially diesel, rather than the price of crude oil. You will hear about this a lot soon." made his assessment.

Pointing out that diesel prices in the transportation and agriculture sectors have increased approximately twofold compared to the pre-war period, Birol said, "There is a tremendous increase. Diesel prices are such that they will put upward pressure on inflation figures all over the world in a very short time." he said.

Birol stated that in addition to high crude oil prices, the damage to some refineries in the Middle East during the war, the decrease in diesel exports from the region and the destruction of some refineries in Russia during the Russia-Ukraine War were effective in this increase, and said, "I can say that the world is going through very difficult times when it comes to diesel." he said.

Explaining that the more important development that shows the magnitude of the current energy crisis is the changes made by countries, companies and consumers in their energy policies, Birol stated that countries are looking for new energy partners and more reliable suppliers with the lessons they learned from the crisis, and they are also turning to new technologies.

Birol stated that nuclear energy developed rapidly after the oil crises of 1973 and 1979, and energy efficiency increased in the automotive sector, and said, "The concern of all countries is to produce as much energy domestically and at home as possible. Here, an issue that almost everyone agrees on is to combine energy with market dynamics and move the economy towards electrification as much as possible." he said.

"For the first time, energy security, costs and climate change targets come together"

Birol underlined that strong signals should be given to the markets and investors in order to realize the climate targets at the 31st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP31), and said, "What I dream of most is this: If 150-200 countries from COP31 sign the target on electrification, this will give a signal to investors and companies. That signal will show itself in new investments, and this will be the practice." he said.

Pointing out that energy security, costs and climate change targets have come together for the first time, Birol said that this is a good development for Antalya.

"If Iran has one Hormuz, China has five."

In his speech at the opening session, Birol stated that China has a strong trump card in critical minerals and said, "To summarize in one word, if Iran currently has one Hormuz, China has 5 Hormuz." he said.

Pointing out that if China reduces the export of rare earth elements, this will directly affect the global automotive industry, Birol said, "If China says, 'I have decided. I am reducing the export of rare earth elements by half after next month.' "If he says so, the entire automotive industry in Europe and the world will suddenly start to fluctuate." he said.

Birol emphasized that the importance of critical minerals is not limited to clean energy technologies, and added that these minerals have a wide range of uses, from the defense industry to the automotive industry, from medicine to many other fields.