Photo: IAEA / Wikimedia
There is a need for investing in existing oil and gas fields to meet global energy demands, the International Energy Agency’s (IEA) director said on Monday, in an apparent reversal from the group’s previous comments on the need to slow fossil fuel investment to limit global warming.
“I want to make it clear … there would be a need for investment, especially to address the decline in the existing fields,” said Fatih Birol, director of IEA at the CERAWeek energy conference in Houston. “There is a need for oil and gas upstream investments, full stop,” he added.
Birol’s comments are more in line with US president Donald Trump’s pro-drilling stance. In 2021, the IEA said companies should not invest in new oil, coal and gas projects if the world wants to reach net-zero emissions by 2050, a stance it has reiterated nearly every year since. The energy watchdog has made combating climate change a core part of its remit in recent years, even amid pressure from fossil fuel advocates.
Kelly Trout, research director at Oil Change International, said Birol’s comments were referring to near-term investment and not necessarily a full reversal of IEA policy, as demand for oil is expected to plateau by 2030.
“There is consistency in the IEA’s modelling time and again that there can be no new oil, gas or coal fields if we want a chance at avoiding reaching the 1.5 degree limit,” she said.
Jordi Schröder Bosch, a researcher at thinktank Positive Money Europe, said it was regrettable that the IEA appears to be reversing its stance and aligning more with investing in fossil fuels.
Birol’s comments not only create more confusion and uncertainty for governments and businesses looking to become net-zero, but “ignores the fundamental reality that continued reliance on fossil fuels exacerbates climate change, and therefore destabilises the global economy, perpetuating energy insecurity”.
US pressure to invest in fossil fuels
Other comments made by oil and gas interests at CERAWeek denied the need for a rapid transition away from fossil fuels. Trump’s second term is “emboldening” the fossil fuel industry amid an unstable geopolitical outlook even as communities in the US are facing increasing pollution and energy bills, Trout said.
Bosch questions whether the sudden shift in policy is due to pressure from non-European oil producers and US geopolitical interests, creating “a concerning alignment of an international institution with specific national agendas”.
“While the influence of each nation is an important factor, we must also consider the broader implications of this shift for global energy security, the fight against climate change and economic competitiveness,” Bosch said.
Monetary policy and public finance also play a pivotal role in driving the transition to renewable energy, said Bosch.
Central banks have tools that they can use to unlock green finance, such as discouraging fossil fuel investments or prioritising green bonds and sustainable assets in their purchases. The European Central Bank, for example, could also issue a green dual interest rate, he said.
“Ongoing geopolitical tensions and evolving tariff decisions create an environment where inflation could resurface unexpectedly. This underscores the need for central banks to maintain a flexible and innovative approach,” he said.
Research from Oil Change International found that rich countries could mobilise over US$5tn a year in climate action if they stopped subsidising fossil fuel companies, made polluters pay for climate damages and changed global financial rules such as forgiving global south debt.
“We do need to see other leaders around the world step up and commit to action that does speed up this transition rather than falling into this trap of a deepening fossil fuel insecurity and instability that the Trump administration is pushing,” Trout said.
This page was last updated March 18, 2025
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
