World is in its ‘first truly global energy crisis’ – IEA’s Birol

Singapore Oct 25 (Reuters) – Tightening of liquefied natural gas (LNG) markets around the world and supply cuts by major oil producers have pushed the world into the middle of the “first truly global energy crisis”, the head of the International Energy Agency (IEA) said. ) said on Tuesday.

IEA Executive Director Fatih Birol said in Singapore that only 20 billion cubic meters of LNG will enter the market next year due to a surge in LNG imports to Europe amid the Ukraine crisis and a recovery in China’s consumption of fuel. International Energy Week.

At the same time, the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, to cut production by 2 million barrels per day (bpd) is a risky decision, as the IEA sees it. This year, Birol said, it has increased by almost 2 million bpd.

Also Read :  Wall Street tumbles on rate, recession worries, bleak chipmaker outlook

Sign up now for free, unlimited access to

“It’s especially dangerous (and we’re talking about a global recession) because many countries around the world are going through economic recessions … this decision is really unfortunate,” he said.

oil Rising global prices of many energy sources, including natural gas and coal, are disrupting consumers at a time when they are already dealing with rising food and service inflation. As the Northern Hemisphere prepares to enter winter, higher prices and the possibility of rationing are potentially dangerous for European consumers.

If the weather stays mild, Europe could get through this winter, but it could be a bit battered, Birol said.

“If we didn’t have a very cold and long winter, and if there were no surprises about what we saw, for example the Nordstream pipeline explosion, Europe should go through this winter with economic and social wounds,” he said.

Also Read :  Brittney Griner arrives in the US after being released from Russian custody in a prisoner exchange

For oil, With consumption expected to increase by 1.7 million bpd by 2023, the world still needs Russian oil to meet demand, Birol said.

G7 nations have proposed a mechanism that would allow emerging nations to buy Russian oil at a discount after the war in Ukraine.

Birol said the plan still has many details and will require the buy-in of major oil-importing countries.

A US Treasury official told Reuters last week that 80% to 90% of Russian oil would continue to flow outside the price-fixing mechanism if Moscow tried to undermine it.

“I think this is good because the world still needs Russian oil to flow into the market right now. 80%-90% is an encouraging level to meet demand,” Birol said.

He said the strategic oil reserve, which could be tapped during supply disruptions, remains substantial, but is not currently on the agenda for another release.

Also Read :  Ithaca Energy shares dip after UK's largest IPO this year

Energy security drives renewed growth.

Birol said the energy crisis could be a turning point for accelerating clean sources and creating a sustainable energy system.

Energy security is the number one driver (of the energy transition) as countries see energy technologies and renewable energy as a solution, Birol said.

The IEA raised its forecast for renewable power capacity growth to 20% in 2022 from the previous 8%, with nearly 400 gigawatts of renewable capacity added this year.

Many countries in Europe and elsewhere are accelerating renewable energy installations by cutting permitting and licensing processes to replace Russian gas, Birol said.

Sign up now for free, unlimited access to

Florence Tan; Reporting by Muyu Xu and Emily Chow. Edited by Jacqueline Wong and Christian Schmollinger.

Our Standards: Thomson Reuters Trust Principles.


Leave a Reply

Your email address will not be published.

Related Articles

Back to top button