This energy crisis surpasses the combined impact of the three greatest crises in history! The world's largest sovereign wealth fund and the International Energy Agency, the two helmsmen, engage in their latest high-profile dialogue.

Ask AI · Why is this energy crisis being described as unprecedented in scale?

“The scale of this current crisis has already surpassed the combined total of the three largest crises in recent decades (the 1973 oil crisis, the 1979 oil crisis, and the energy shock triggered by the Russia-Ukraine war in 2022).”

“We are heading toward a major supply disruption, and so far, this is very likely the biggest crisis in history.”

“I don’t think releasing reserves itself is a solution. The key to resolving this is still to restore the Strait of Hormuz to smooth sailing.”

“This crisis is likely to reshape the global energy market landscape for the coming years.”

This energy crisis began suddenly, but its persistent influence can be said to have only truly tightened global nerves about two or three weeks after the conflict started.

Nicolai Tangen’s Good Company podcast just released a highly timely conversation, recorded on March 30, and almost immediately published.

Both participants clearly understand that this is not a topic that can be slowly digested by the market.

The guest is Fatih Birol, one of the most influential figures in the global energy sector.

Birol has been Executive Director of the International Energy Agency (IEA) since 2015, an intergovernmental organization born after the first oil crisis, originally established to coordinate member states’ responses to oil supply disruptions.

Today, its member countries and partner nations cover about 80% of global energy consumption. So this is not an external commentator discussing risks, but an organization born from crises, viewing this shock through its database and systemic perspective.

The most noteworthy part of this conversation is Birol’s repeated effort to clarify the “magnitude.” He compares this crisis with the major energy shocks of 1973, 1979, and 2022, and concludes: this impact is likely larger and more complex than market understanding.

He sees risks not only in energy itself but also in the cascading effects through oil and gas, liquefied natural gas, electricity prices, inflation, and fiscal resilience. Ultimately, the most vulnerable may not be the usual Europe and America, but emerging markets and developing countries that depend on imports and lack buffers.

For Chinese investors, this conversation has another layer of value.

Because many of Birol’s mid- to long-term clues are closely tied to China. The rebalancing of coal demand first looks at China; China has taken the lead in solar manufacturing; the pace of battery and electric vehicle technology and industry development—all are examples China cannot ignore.

In other words, this crisis is first a geopolitical shock, but it is also amplifying the industrial positions of different countries. China is not only affected but also shaping the future energy landscape in many key areas.

As a participant, Nicolai Tangen is CEO of Norges Bank Investment Management, which manages the world’s largest sovereign wealth fund.

How to navigate uncertain environments? The latest dialogue with the head of the world’s largest sovereign fund: “In turbulent times, you first need to tie yourself to the mast”…

You will see that his persistent questions are actually what investors care most about: How big is this crisis? What’s the worst that could happen? Which changes are short-term reactions, and which will become structural trends over the coming years?

Interestingly, Tangen also asked about Ningde Times (CATL). Birol’s answer was straightforward: the IEA looks at many technologies, their market positions, technological progress, economic viability, penetration, and deployment speed. And his most optimistic view is on batteries.

And Tangen doesn’t blindly accept Birol’s judgment. He sharply asked at the end: how do you view your own mistakes and how do you correct them?

Birol replied that everything depends on data. “What we do is lay out data and facts; how governments, investors, and industries decide is up to them.”

The world is highly uncertain, and that’s not wrong to say.

Smart investors (ID: Capital-nature) have organized this heavyweight dialogue into insights worth repeatedly digesting.

Further reading: The world’s top energy trader shares insights on China’s research, US energy system bottlenecks, and the optimistic timeline for advanced nuclear scale-up—10 to 15 years at best…

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This energy crisis is likely the biggest in history

Tangen recently warned that markets and policymakers still underestimate the consequences of the Middle East crisis. What exactly did they get wrong?

Birol: You know, we are an intergovernmental organization serving governments.

After the outbreak of war, because market changes are very complex, I told myself to wait three weeks before making public statements. During that time, despite many interview requests from journalists, we didn’t respond.

Except for one statement I made about releasing oil reserves, I didn’t speak publicly on other matters.

But later I saw that European and global decision-makers didn’t really grasp how serious this was, and that its impact is not only on the energy sector but on the global economy.

So about a week ago, I decided to release some figures to make everyone realize how serious this is. It’s not just about energy; it concerns all of us.

To address this, we must first acknowledge how big the problem really is. What I want to do is clarify the issue.

This step is necessary. At least, in my view, it has indeed prompted policymakers to discuss the current situation more intensively.

Tangen: You said this is the biggest threat to global energy security in history, more serious than the 1973 oil crisis… What indicators led you to this conclusion?

Birol: We’ve seen many energy crises. Looking over the past decades, three stand out: the 1973 oil crisis, the 1979 oil crisis, and the energy shock after the Russia-Ukraine war in 2022.

Let’s start with 1973 and 1979.

In those crises, the world lost about 5 million barrels of oil supply per day each. That’s roughly 10 million barrels combined.

We all know those crises ultimately pushed many countries into recession, and many developing countries into vicious debt cycles.

Today, based on current conditions, we’ve lost about 12 million barrels per day. That means, just in oil, this impact exceeds the combined effect of 1973 and 1979.

Looking at natural gas, when Russia cut supplies back then, the global loss was about 75 billion cubic meters. Now, the scale of natural gas loss has already surpassed that of the Russia gas crisis.

In other words, the scale of this crisis has already exceeded the sum of those three crises mentioned earlier.

Moreover, besides oil and gas, many other commodities vital to the global economy—such as petrochemicals, fertilizers, helium, sulfur—are affected, which are critical to supply chains.

If I add that we’ve been tracking damage to energy infrastructure in the region, our database shows 40 key energy assets damaged. Some lightly, some severely, with recovery taking time.

So, based on these figures and indicators, I decided to speak out publicly, to make clear that we are heading toward a major, major supply disruption, and so far, this is very likely the biggest in history.

The most critical solution is to restore the Strait of Hormuz to smooth sailing

Tangen: What do you think will happen next?

Birol: I’m glad to see many governments already realize the seriousness and are taking measures.

G7, G20, Europe, Japan—all are acting. I just met with Japanese Prime Minister Kishida Fumio last week, and the day before, I met with Australian Prime Minister Albanese.

Currently, Asia is hit hardest, but the impact will also spread to Europe and other regions.

So, countries now recognize the severity, and we are discussing how to better respond to the situation.

Of course, I must say that the measures taken by IEA and governments are very important, but the most critical solution remains restoring the Strait of Hormuz.

Tangen: But the strait isn’t fully closed now, right? It’s just limited to friendly countries or ships deemed non-hostile by Iran still allowed passage.

Birol: Yes.

Tangen: When such a critical chokepoint is treated this way, what do you do?

Birol: This is one of the most fragile points in the global energy system, for both oil and gas. So we are also looking for other responses.

One measure you should know: on March 11, I announced releasing 400 million barrels of oil reserves, including both crude and refined products.

As soon as the news came out, oil prices immediately dropped $18. Of course, many parties then made statements, and prices rebounded.

We also advised many governments to take demand-side measures. It’s not easy, but very important—for example, promoting remote work in some cases, lowering car speed limits, etc.

Additionally, I think some countries need to do more to support the most vulnerable populations financially.

A more technical point: we often see discussions about Europe, Japan, Australia, Korea, etc., but the biggest risk I see today is in emerging markets and developing countries, which are hit especially hard.

Especially those dependent on imported oil and gas; their economies are bearing the brunt. Currently, Asia is the first to be affected, but it will soon spread to Africa, Latin America, and beyond. That’s my biggest concern.

April will be much worse than March

Tangen: How long will this impact take to feed into higher inflation?

Birol: I don’t know when your podcast will go live, but in two days, it will be April.

Tangen: We’ll speed up the release.

Birol: Good, very soon. I’ll say directly: April will be much worse than March.

Why? Let me explain. Because in March, some oil and gas cargoes already set out before the war started, still en route, arriving gradually at ports.

So, March still enjoyed some buffer from these “old shipments,” with oil, LNG, and other energy still arriving.

But by April, that buffer will be gone. This means, even with our relatively conservative estimates, the loss of oil supply in April will be twice that of March. Not to mention the compounded issues with LNG and other energy products.

So, this will definitely feed into inflation.

Next, it will depress economic growth in many countries, especially emerging and developing ones, which lack hard currencies and will face even tougher situations.

We are very likely to see energy rationing appear quickly in many countries.

The biggest problem is shortages of jet fuel and diesel

Tangen: The 400 million barrels you released is about 20% of total reserves, right? Under what circumstances would you recommend further releases?

Birol: We evaluate the market daily, even continuously 24/7. If we see the need, whether for crude or refined products, we may intervene further. I will also advise governments accordingly.

The biggest current challenge is shortages of jet fuel and diesel. That’s the main issue now.

We’ve already seen this in Asia, and I believe it will soon spread to Europe, possibly in April or early May.

So, my colleagues and I are constantly assessing the situation. When the time is right, I will make a judgment and recommend further actions.

Tangen: Is there a threshold point where such releases, meant to stabilize the market, might instead disrupt it?

Birol: I think, for now, it’s still a stabilizing measure.

But as I said, 400 million barrels is the largest release in our history.

This is double the scale of the release during the crisis after Russia invaded Ukraine. But I must be very frank: this is only to ease pain, not a cure.

The real solution remains the reopening of the Strait of Hormuz. That’s the most critical issue!

What we’re doing now is just helping the market cope temporarily, buying some time. In other words, I don’t think that releasing reserves itself is a solution.

Europe will face high energy prices and electricity prices simultaneously

Tangen: What do you think about some European governments subsidizing energy bills for residents?

Birol: If such support is targeted and temporary, I think it can be part of the solution.

Europe faces many problems now, but one is that its overall response has been slow so far.

I’ve spoken with many government leaders worldwide, and I think Europe’s response has indeed been a bit slower than others. Many think this is an Asian or Middle Eastern problem.

But it’s not. Energy markets are global, and they are interconnected.

So the first thing is that European governments must realize this is a major issue that will hit Europe soon. We need to wake up Europe.

Currently, Europe is heavily buying natural gas on the spot market. Today, Asian buyers, unable to get LNG from the Middle East, are rushing into the spot market, which is also where Europe usually sources most of its gas.

As a result, European natural gas prices are rising. Meanwhile, Europe’s electricity prices are set by natural gas marginal costs, so electricity prices are also climbing.

In short, Europe will face high gas prices and high electricity prices simultaneously.

In my view, European governments should support the most vulnerable groups, but support must be targeted and temporary.

What I’m really worried about (perhaps crossing into politics, which is not my expertise) is that high energy prices in Europe could, before key elections, give extremists an opportunity.

Tangen: You’ve been urging European governments not to relax restrictions on Russian gas, right?

Birol: Yes.

Tangen: Do you think that’s realistic? What if this situation persists into next winter?

Birol: I think, for three reasons, that’s not realistic.

First, technically, it’s almost impossible. “Nord Stream 1” has been damaged, infrastructure is incomplete; “Nord Stream 2” has not yet received German approval. Other pipelines are too small and limited in significance.

Second, it’s not economically viable. Russia’s gas was mostly priced linked to oil prices, and with oil prices so high now, Russian gas itself will be very expensive.

Third, and most importantly, I’ve been saying this for nearly 25 years. When I was chief economist at this agency, I repeatedly warned that Europe’s over-reliance on Russia was a major mistake. We’ve paid the price for that mistake.

One mistake, yes; if it happens again, it’s no longer a mistake but deliberate negligence.

The crisis is likely to reshape the global energy market landscape for the next few years

Tangen: In the last crisis, LNG was part of the solution. But this time, it has, in some ways, become part of the problem. What’s changing in the LNG market dynamics?

Birol: LNG, and even more broadly, the entire natural gas industry, may suffer some reputational damage.

Why? Because natural gas has long been seen as a reliable, affordable, and flexible energy choice—and that view was not wrong.

But from the 2022 Russia gas crisis to today’s crisis, I think this will cast a long shadow over the industry.

The natural gas industry must work harder to prove it remains reliable, affordable, and flexible. I believe some countries may lose some credibility because of this event, and the industry itself will be affected.

Whether this impact is temporary or longer-term, I can’t say for sure yet, but I see this trend already happening.

Of course, from a structural perspective, some countries may benefit from this crisis.

In my personal view, this crisis is very likely to reshape the global energy market landscape over the next few years.

Best and worst-case scenarios

Tangen: IEA no longer makes traditional forecasts, right? You focus more on different scenarios.

Birol: Correct.

Tangen: What would be the best-case scenario for the Middle East?

Birol: I think Middle Eastern countries have already suffered losses and will continue to face shocks.

But if we look at the Middle East, we need to distinguish. Countries like Iraq, Lebanon, Bahrain will be hit hardest; while Gulf oil producers like Saudi Arabia, UAE, Kuwait will recover much faster.

For example, 90% of Iraq’s government revenue comes from oil sales. Now, Iraq’s fiscal revenue has fallen to very low levels. But this revenue is used to pay wages and pensions for about 15 million people. So Iraq’s recovery will be much harder than Saudi Arabia or the UAE.

Therefore, both the oil industry and these countries will need to work hard to regain “reliable supplier” credibility. It will take time.

But they have also achieved many miracles before, and may do so again in the future.

However, I will differentiate between weaker countries like Iraq and the Gulf oil states.

Tangen: And the worst-case scenario?

Birol: The worst case is the continued closure of the Strait of Hormuz. That would likely cause a major shock to the global economy.

And this impact would hit emerging markets and developing countries especially hard. They are not the cause of this crisis, nor part of the problem, but they could bear the greatest costs. That’s what I worry about most.

Looking back to the 1970s, many countries fell into debt spirals, triggering a series of economic, political, and social consequences.

My greater concern is the risk along that line.

But I hope it doesn’t come to that. I also hope the Strait of Hormuz can reopen soon, and markets can start to recover.

Meanwhile, we must think globally. We will take some short-term measures, but this crisis will also bring long-term, structural responses.

The world needs to build more resilient power grids

Tangen: Tell us about these changes. Because we might see shifts in renewables, nuclear, etc. Can you sketch out what transformations you expect?

Birol: It’s still too early to be very specific.

But when I study these issues, I often look back carefully at the 1970s oil crisis.

And I see three key changes that emerged afterward—though there were more.

First, nuclear power. In response to the oil crisis, a wave of large-scale nuclear construction swept the world, totaling about 170 gigawatts of installed capacity. That’s roughly 40% of today’s global nuclear capacity.

Many of these reactors were built in Europe, Japan, South Korea, the US, Canada, and Israel after the oil crisis. That’s the first point.

Second, the automotive industry. Before the 1970s, a typical car consumed about 20 liters of fuel per 100 km.

After the crisis, many countries introduced fuel efficiency standards, quickly reducing that to 10 liters. That’s nearly halving fuel consumption per 100 km.

Third, domestic energy production. North Sea output surged during that period, mainly as a response to the oil crisis.

Rising oil prices prompted governments to give tax incentives, accelerate licensing, and speed up development.

So, at least three major shifts happened after that. My overall judgment now is similar.

In fact, four years ago, I said nuclear would make a comeback, and this time, the return would be even stronger. Both traditional nuclear and small modular reactors will come back.

Second, especially in Asia, electrification of transportation will accelerate significantly.

Third, renewable energy will develop faster with energy storage batteries.

Beyond that, I wouldn’t be surprised if coal makes a comeback in some countries. Some may be temporary, others longer-lasting. For example, China, Indonesia, India might increase coal use again due to high natural gas prices.

So, the general response after this crisis could be: more nuclear, faster transportation electrification, faster renewable expansion, and a revival of coal and other domestic energy sources.

Tangen: Let’s break these down. As everything electrifies, are we building a more fragile system or a more resilient one?

Birol: It depends on how you do it.

If the entire energy system continues toward electrification, we will still use oil and gas for many years. But I’ve been saying for the past year and a half that we are entering an “electricity era.”

The reason is simple: electricity demand growth is now twice the overall energy demand growth. AI, data centers, electric vehicles—all are pushing electricity demand upward.

So, the world must build more resilient power grids.

But this also raises a new concern: cyberattacks will increase. We must be very careful about the security of power systems because the world is becoming more dangerous, and energy systems are unfortunately targets for malicious actors.

In a highly electrified energy system, what do you see as the biggest systemic risk?

Birol: One risk is government failure. Basically, not enough grid capacity.

Last year, the world added a large amount of renewable capacity, but there are still four times that amount of renewable projects built but idle because of insufficient grid capacity.

Solar panels are installed, wind turbines are in place, but the transmission grid can’t keep up.

That’s one real risk and a practical problem.

Another issue, besides the grid itself, is cybersecurity and cyberattacks on the grid. That’s one of my biggest worries. Our data shows attacks are increasing in both intensity and frequency.

Tangen: We bought about 25% of a German grid operator. How can we attract more capital into this sector?

Birol: Of course, I’m not speaking about any specific company. But if we want to accelerate investments in grids and related infrastructure, governments must first recognize its importance and make this sector attractive to investors.

In recent years, unfortunately, many governments focused on promoting renewable power projects and power plants, neglecting a key fact: we also need grids to deliver that electricity from generation to homes and industries. It’s time to fix that.

If governments truly value this, they must establish proper investment frameworks and streamline approval processes. Both are crucial.

Tangen: I’ve seen data saying that by 2035, electricity demand will grow by 40%. How much can existing infrastructure handle?

Birol: I think the situation now is different from before. In the past, we thought the main difficulty was building new power plants. Today, the real challenge is that the world has not kept pace with grid development. This is not just a European problem but a global one. To me, this is the Achilles’ heel of the “electricity era.”

On coal, nuclear, and batteries

Tangen: You also mentioned coal earlier. How will coal develop?

Birol: When talking about coal, it’s really about China to some extent. Because today, about 55% of global coal consumption happens in China, and the remaining 45% is spread across other countries.

Over the past few years, global coal demand has been roughly flat. Our previous view was that it would stay stable and then gradually decline.

In this current crisis, I wouldn’t be surprised to see a rebound in coal use worldwide, starting mainly in China, but other countries may follow.

In the US, we’ve already seen coal use pick up again. I wouldn’t be surprised if some European countries, under current emergency conditions, also reactivated their coal reserves.

Tangen: And nuclear power? Europe spent twenty years reducing nuclear capacity. How big a mistake do you think that was?

Birol: For Europe, I believe we made three historic, strategic errors.

The first, as I already mentioned, was over-reliance on a single country—Russia—for critical commodities like natural gas.

The second was nuclear. In the late 1990s, about one-third of Europe’s electricity came from nuclear. Now, it’s down to about 15%. Europe actively turned away from nuclear power. To me, that’s a historic mistake.

Now, almost every country is rethinking this. Even France. When Macron first took office, one of his policy goals was to cut France’s nuclear share from 75% to 50%.

At that time, French media asked me what I thought. I said it was like selling the Eiffel Tower.

Because nuclear is one of France’s most important national assets. Many countries made this mistake. That’s the second error.

The third mistake is, globally, I see that about three-quarters of new power capacity today is solar. And the manufacturing of solar panels is now mainly concentrated in China.

Twenty-five years ago, Europe was the pioneer in solar panel industry. But Europe let go of that opportunity, and China took over, now dominating the entire industry.

For Europe, these three mistakes—overdependence on Russia, abandoning nuclear, and losing the lead in solar tech—have cost a lot: they hurt Europe’s competitiveness, economic security, and even its diplomatic space.

Tangen: If we expand this further, including Europe’s position in the battery market—like CATL’s nearly 40% market share—what do you think?

Birol: We’ve established a strong technical team that tracks about 600 technologies daily. We look at their market position, technological progress, economic viability, penetration, and deployment speed.

If you ask me, if I had a magic wand to make one technology immediately economically viable and widely adopted, I’d choose batteries.

Why batteries? Because they will change many things. They will reshape renewable energy development and transform transportation.

Of course, Europe is currently behind China in this area. But in advanced battery tech, Europe still has a chance to catch up.

I’ve been discussing this with European governments, and I see that Europe is starting to take this seriously, viewing next-generation advanced batteries as an opportunity to gain a lead.

I believe this will benefit Europe’s economic security and competitiveness.

Tangen: The progress in battery tech is truly astonishing, right? The latest generation is developing at an incredible speed.

Birol: Absolutely, it’s very impressive. And AI will further accelerate this process.

Crisis accelerates EV adoption

Tangen: Speaking of EVs, Europe started well, but now the entire Western world seems to be shrinking its ambitions. What impact will that have?

Birol: Let me give you a number. Sorry if I give too many, but I speak through data.

Five years ago, EVs accounted for 5% of new car sales globally. Last year, that rose to 25%. This change is happening very fast and will continue to accelerate.

Of course, China is far ahead.

European automakers still need time and policy flexibility. But the direction is clear: the future of transportation is electrification.

And returning to our earlier discussion about the Middle East, I believe this war will only speed up that process. As for how fast Europe will catch up, that’s still under discussion.

But I believe that if European companies want to remain global leaders and stay competitive, the future is definitely electric.

I’m talking about passenger cars now, but just wait—if we record another podcast in two years, we might be discussing electric trucks. That change will come quickly too.

I’ve been closely watching China’s progress in this area.

So, I think most major markets worldwide will move toward electrification in transportation. Some countries may differ, like certain regions in North America or Latin America, where internal combustion engines might last a bit longer.

But from the largest global market perspective, especially in Asia and among developing countries, the penetration rate of electric vehicles in the auto market will only increase faster after this crisis.

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Challenges facing Europe

Tangen: If we put all these factors together—natural gas, oil, nuclear, batteries, transmission networks—the result is that Europe’s electricity prices are two to three times those of the US, and much higher than China’s. What does this mean for Europe as an industrial power?

Birol: I think Europe’s competitiveness is indeed under serious pressure.

In my view, Europe has some traditional industries that still need government support. But we must also admit that some of these industries will find it very hard to compete with other regions in the future, especially energy-intensive sectors. Because these energy price gaps won’t disappear overnight.

So, Europe must do two things: support some carefully chosen, truly important traditional industries to keep them in Europe; and also develop a roadmap for future industries, actively promoting their growth.

These future industries include AI, clean energy tech, and more.

In other words, Europe now needs to do two things simultaneously. First, identify which traditional industries are worth supporting to keep them in the European economy. Second, focus on key future technologies that we should prioritize and continue to develop along that path.

But I also want to add: as a major investor, you probably also sense that many outside voices are pessimistic about Europe. There’s a lot of negative sentiment.

But I still believe Europe has strong economic fundamentals. It has a single market of 450 million people, is a democratic region, and continues to attract investment, with strong export and trade capabilities.

As long as industrial and energy policies are aligned, I think Europe can get through this tough period.

Tangen: How do you see the relationship between AI and electricity prices? On one hand, AI demand itself could push energy prices higher; but on the other hand, higher energy prices will deeply influence AI’s future use and development. After all, one of the biggest costs is electricity.

Birol: Exactly right. Nikola, maybe you don’t know, but the IEA is a very small organization in terms of staff.

But four years ago, we already made AI one of our key research areas. The reason is simple: without electricity, there’s no AI.

A medium-sized data center consumes as much power as a town of 100,000 households. And this demand is 24/7.

Today, AI is sparking a global competition. The main players are the US, China, and Europe. There are others, but these three are the biggest.

And in my view, AI might be the most decisive technological innovation humanity has seen so far. Who wins this race depends on two factors:

First, the technology itself—software. Second, whether there is enough, cheap electricity.

Maybe I’m overusing this analogy, but the point is: if you don’t have abundant, cheap electricity, and can’t quickly deliver it to data centers, you will fall behind.

So, countries with ample, low-cost power, and the ability to rapidly supply it to data centers, will lead by several steps.

What I see now is that Europe still has a lot of work to do on the second point. Technology is important, but for Europe, the challenge of electricity—its cost and supply—is much harder than for the US, and far more difficult than for China.

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On the accuracy of judgments and how to correct mistakes

Tangen: Birol, you guys have many correct judgments, but also some mistakes, right? Especially regarding the speed of clean energy transition.

Birol: We get criticized every day, that’s part of our routine. Investors criticize us, governments criticize us.

Some people even think we are too optimistic about clean energy. So, hearing you say we’ve been too conservative is an interesting balanced perspective.

Our approach is to present different scenarios, different pathways, different assumptions.

Ten years ago, on solar penetration, we were indeed conservative. China’s rapid development surprised everyone—us included—and the whole world was shocked.

But beyond that, I believe our overall assessment of today’s main trends—solar, wind, nuclear, oil, natural gas—is still correct.

Of course, we don’t pretend to be infallible. Our job is to lay out data and facts.

If we’re wrong, we admit it and correct course. And we don’t overstate how right we are.

I often tell colleagues a motto: Data will ultimately win. Sometimes it just takes time. But in the end, data always wins.

What we do is present data and facts; how governments, investors, and industries decide is up to them.

Tangen: How do you view your judgments on fossil fuel production? How accurate do you think you’ve been?

Birol: For example, on natural gas demand, our judgment was correct. On oil, we were also spot on.

We predicted that as China’s economy slowed and EV penetration increased, oil demand would start to decline. We believed coal would plateau, and that’s basically happening now. We’ve also consistently expected strong growth in renewables.

That’s why we now prefer to offer different scenarios rather than a single forecast, because there are too many uncertainties.

If you follow this approach, you get different outcomes and consequences.

What we provide policymakers are different pathways and options.

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On Norway and the IEA’s own evaluation

Tangen: Norway has certainly made money from oil and gas. Our fund manages that wealth for future generations. Setting politics aside, from a systemic perspective, do you think Norway should continue exploring more oil and gas?

Birol: That’s entirely up to the Norwegian government and people.

I often visit Norway. I like the people in Norway’s energy sector, I like Norwegian football. I think Norway does very well. Your energy system is very clean, EV adoption is high.

You should be proud of what you’ve contributed to global energy security, European energy security, climate change, and helping poor countries, especially in Africa.

If more countries like Norway existed, our current situation wouldn’t be so difficult.

Tangen: And Bodø/Glimt (one of Norway’s most successful recent football teams) and the IEA—any similarities?

Birol: There’s a similarity and a difference.

The similarity is, we both achieve a lot with very limited resources.

You might think, the IEA deals daily with global leaders, releases reports, and everyone discusses them. The report you mentioned gets a lot of attention. People ask when it will come out, how we judge things, whether it’s three or five.

But in reality, our core budget is only about 22 million euros. Not much. Many similar organizations have budgets ten, twenty, or even a hundred times larger.

With such a small budget, we’ve achieved these results—almost a miracle, in my view. Why? Because we have an excellent team.

That’s very much like Bodø/Glimt.

As for the difference, Bodø/Glimt has been knocked out of the Champions League, but the IEA remains a leader in the energy world. That’s the small difference.

Tangen: That’s a very nice way to end. “You still are the champion of the energy world.” Hope that status can last many years.

— / Cong Ming Tou Zi Zhe / ——

Layout: Tang Tang

Editor: Ai Xuan