The Trump administration spent much of the past year berating the International Energy Agency and threatening to quit the Paris-based organization. Now, it might be one of the administration’s best hopes for staving off a global spike in oil prices.
The sudden shift in the administration’s relationship with IEA shows how the U.S.-Israel war with Iran is upending international diplomacy as the conflict roils energy markets. Energy Secretary Chris Wright repeatedly criticized IEA in recent weeks for modeling a net-zero energy system and predicting a peak in global oil consumption. But the administration has looked to IEA for help in the days since President Donald Trump ordered widespread attacks on Iran. The agency is coordinating the release of emergency oil stockpiles worldwide.
Trump is under increasing political pressure to stem rising oil prices following Iran’s near-closure of the Strait of Hormuz. Brent, the international benchmark for crude oil prices, has risen roughly 40 percent since the conflict began 18 days ago. On Monday, Trump lashed out at countries that rebuffed his call to send naval vessels to escort tankers through the strait, saying “we don’t need anybody.”
Jason Bordoff, founding director of the Center for Global Energy Policy at Columbia University, said he was relieved the administration had not followed through on Wright’s threats to leave IEA based on its net-zero modeling initiatives.
“We’re seeing today, when President Trump is taking to social media to ask both allies and adversaries alike to work with us to reopen the strait, how important multilateral engagement can be and energy is no different,” said Bordoff, who served as an energy adviser to President Barack Obama. “So if we want to deal with energy supply shocks, adversaries around the world who weaponize energy, we’re in a stronger position if we all work together.”
IEA was founded by Western nations in response to the Arab Oil Embargo in 1974. For much of its existence, the organization was focused on monitoring global energy markets and coordinating the release of governments’ emergency oil inventories. But in recent years the agency has broadened its focus to include climate change. In 2020, its annual energy outlook dropped a business-as-usual scenario that showed oil demand rising, and replaced it with net zero modeling that foresaw an energy system largely free of fossil fuels — an outcome that Wright described as a “crazy bad idea.”
The decision prompted fierce criticism from congressional Republicans and the oil industry, which argued IEA was straying from analysis to advocacy. Wright, a former fracking executive, picked up the mantle when he became Energy secretary last year, warning the U.S. would leave the agency if it did not return to its historic focus on energy security.
IEA has since reinstated its business-as-usual scenario, showing climbing oil demand. But Wright has continued to criticize the agency. During a trip to Paris for an IEA summit last month, he accused the agency of acting like a “climate advocacy organization” and said “this organization has been pushed off-course.” When the summit ended, IEA released a summary of the meeting that was largely scrubbed of climate change and emphasized energy security.
Ten days later, the U.S. and Israel attacked Iran. In response, Iran targeted energy infrastructure and tankers in the Persian Gulf. Oil prices rose, prompting fears the war could trigger an economic crisis.
Roughly 20 million barrels a day transited the Strait of Hormuz before the conflict, or about a fifth of global oil supplies. Energy analysts said there is no policy that can fully compensate for the loss of those shipments, other than reopening the strait. Releasing oil from emergency stockpiles is one of the few tools that governments have for limiting the economic damage, at least in the short term.
On March 11, IEA announced that its membership of 32 nations had agreed to release 400 million barrels, including 172 million barrels from the U.S. Strategic Petroleum Reserve.
“The IEA’s coordination with the US government and with our other Member governments has been excellent, as reflected by the quick and decisive collective action to bring a record amount of additional oil supply to markets to counter the disruptions we are seeing,” IEA spokesperson Lee Bailey said in a statement.
Ben Dietrich, a DOE spokesperson, said Wright has been in “regular direct contact,” with IEA Executive Director Fatih Birol.
The coordination with IEA is in contrast to Trump’s go-it-alone approach on foreign policy. He has imposed tariffs on allies and threatened to seize Greenland from Denmark, a NATO member. In January, Trump announced the U.S. was withdrawing from 66 international organizations, including the United Nations Framework Convention on Climate Change.
But the administration did not follow through on its threats to quit the IEA. That speaks to the agency’s importance to global energy policy in the eyes of Trump’s team, said Bob McNally, the founder of Rapidan Energy. It also highlights the changes IEA made to accommodate the administration.
“They recognize the important security role, which the IEA is fortunately getting back to,” said McNally, an adviser to former President George W. Bush who has criticized the agency’s forecasts of peak oil. “That’s good because now we really need it. We would have regretted walking away from the IEA and having to go back and say, ‘Hey, by the way, can we do a coordinated release?’”
Questions about the rocky relationship between the U.S. and the IEA remain. The agency’s European members are particularly keen for it to continue its net-zero modeling. The United States, meanwhile, has not paid its annual dues for 2024 and 2025.
Some of those payments date to the Biden administration, said Dietrich, the DOE spokesperson, adding that “the United States continues to review and process payments as quickly as possible.”
Asked if the conflict had changed Wright’s view of the IEA, he said, “Secretary Wright continues to believe the IEA should be focused on its founding mission of maintaining energy security.”
