U.S. threatens to leave International Energy Agency over unrealistic green transition push

07/20/2025 / By Laura Harris

The United States may exit the International Energy Agency (IEA) unless the organization reforms what U.S. officials call biased, overly optimistic green energy forecasts that diverge from its original energy security mission.
Created in 1974 to ensure oil supply stability after the 1973 oil embargo, the IEA has expanded its focus over the decades to include renewables, energy efficiency and climate transition planning, especially after the Paris Agreement.
Energy Secretary Chris Wright argues the IEA has become an advocate for climate policy rather than a neutral forecaster, calling its oil demand projections methodologically flawed and warning they may undermine traditional energy investment.
As the IEA’s largest funder (25 percent of the budget), a U.S. withdrawal could trigger a legitimacy crisis, disrupt emergency coordination and fragment international energy governance, potentially giving rise to rival institutions.
The loss of U.S. support could erode trust in IEA forecasts, heighten market volatility and complicate capital allocation across energy sectors, leaving investors grappling with conflicting signals and long-term strategic uncertainty.

The United States may withdraw from the International Energy Agency (IEA) unless the organization reforms its “unrealistically green” energy forecasts.

IEA, which was created in 1974 by 16 Organization for Economic Co-operation and Development (OECD) countries in response to the 1973 Arab oil embargo, aims to secure stable energy supplies for industrialized nations, maintain emergency oil reserves, coordinate emergency responses to supply disruptions and provide objective energy data.

However, U.S. Energy Secretary Chris Wright argued that the agency has veered far from that mandate.

Over the past five decades, the IEA has significantly broadened both its membership and mission, now encompassing 31 member countries and partnerships with major economies like China and India. Its scope has evolved from oil security to include natural gas, energy efficiency, renewables and comprehensive energy transition planning, particularly following the Paris Agreement. (Related: Terence Corcoran: A not-so-green reality behind the green transition.)

“The IEA was established to ensure energy security, not to advocate for particular energy technologies or policies. Their recent forecasts have strayed far from objective analysis,” Wright said.

In a blunt interview with Bloomberg at the Pennsylvania Energy and Innovation Summit in Pittsburgh on July 15, Wright accused the IEA of straying from its core mission of energy security, alleging it has become “an advocate” for green technologies and climate policies. Wright claimed that the oil demand forecasts of the IEA are methodologically flawed, its analysis is biased by assuming rather than critically evaluating aggressive climate policies, it has strayed from its original mission of energy security and its projections may deter much-needed investment in traditional energy infrastructure.

As a response, Wright presented two options: either reform the organization to prioritize objective data analysis and energy security or withdraw U.S. membership and funding entirely.

“We will do one of two things: we will reform the way the IEA operates or we will withdraw,” Wright said during the interview. “My strong preference is to reform it.”

While Wright expressed a preference for reform, he underscored that withdrawal remains a serious possibility if changes are not made.

U.S. exit could prove fatal for IEA

The U.S. is the largest financial contributor to the IEA, supplying roughly 25 percent of its operating budget.

In other words, the potential departure of the U.S. would make the IEA face not only a significant budget shortfall but also the risk of a broader crisis of legitimacy. Other member countries, especially those critical of the agency’s increasing climate focus, might reconsider their participation.

The loss of U.S. leadership would diminish the IEA’s ability to coordinate emergency oil stock releases, collect global energy data and shape market expectations. International cooperation could fragment, with new, potentially competing energy forums emerging – possibly along ideological or regional lines.

For energy markets, a U.S. withdrawal introduces added uncertainty. The IEA’s forecasts guide trillions of dollars in investment decisions. Without unified and trusted projections, market actors would be forced to navigate diverging forecasts and geopolitical signals, likely increasing price volatility. Investors may begin to question the reliability of long-term demand outlooks and coordination around strategic petroleum reserves, an IEA cornerstone, could falter. A fragmented information landscape could accelerate divergence in energy policy and investment between regions, complicating the already delicate energy transition.

For energy investors, diverging forecasts and political uncertainty complicate capital allocation across fossil and renewable assets. Oil and gas companies must weigh continued exploration against transition risks, while renewable developers face regulatory volatility and policy inconsistency. Financial institutions will be caught between growing demands for climate disclosures and the need to manage exposure to traditional energy. Even as WTI crude remains stable at $65.87 per barrel (as of July 16, 2025), long-term uncertainty looms large.

Head over to GreenTyranny.com for more similar stories.

Watch Environmental Protection Agency Administrator Lee Zeldin reiterating his refusal to spend tax dollars on “climate alarmism” measures in this clip.

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U.S. threatens to leave International Energy Agency over unrealistic green transition push

U.S. exit could prove fatal for IEA

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