Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

World is in its 'first truly global energy crisis' - IEA's Birol

World Oct 25, 2022 12:17PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. Dr. Fatih Birol, Executive Director of the International Energy Agency speaks during the 15th Singapore International Energy Week, in Singapore October 25, 2022. REUTERS/Isabel Kua 2/2
 
NG
+1.20%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Emily Chow and Muyu Xu

SINGAPORE (Reuters) -Tightening markets for liquefied natural gas (LNG) worldwide and major oil producers cutting supply have put the world in the middle of "the first truly global energy crisis", the head of the International Energy Agency (IEA) said on Tuesday.

Rising imports of LNG to Europe amid the Ukraine crisis and a potential rebound in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters of new LNG capacity will come to market next year, IEA Executive Director Fatih Birol said during the Singapore International Energy Week.

At the same time the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to cut 2 million barrels per day (bpd) of output is a "risky" decision as the IEA sees global oil demand growth of close to 2 million bpd this year, Birol said.

"(It is) especially risky as several economies around the world are on the brink of a recession, if that we are talking about the global recession...I found this decision really unfortunate," he said.

Soaring global prices across a number of energy sources, including oil, natural gas and coal, are hammering consumers at the same time they are already dealing with rising food and services inflation. The high prices and possibility of rationing are potentially hazardous to European consumers as they prepare to enter the Northern Hemisphere winter.

Europe may make it through this winter, though somewhat battered, if the weather remains mild, Birol said.

"Unless we will have an extremely cold and long winter, unless there will be any surprises in terms of what we have seen, for example Nordstream pipeline explosion, Europe should go through this winter with some economic and social bruises," he added.

For oil, consumption is expected to grow by 1.7 million bpd in 2023 so the world will still need Russian oil to meet demand, Birol said.

G7 nations have proposed a mechanism that would allow emerging nations to buy Russian oil but at lower prices to cap Moscow's revenues in the wake of the Ukraine war.

Birol said the scheme still has many details to iron out and will require the buy-in of major oil importing nations.

A U.S. Treasury official told Reuters last week that it is not unreasonable to believe that up to 80% to 90% of Russian oil will continue to flow outside the price cap mechanism if Moscow seeks to flout it.

"I think this is good because the world still needs Russian oil to flow into the market for now. An 80%-90% is good and encouraging level in order to meet the demand," Birol said.

While there is still a huge volume of strategic oil reserves that can be tapped during a supply disruption, another release is not currently on the agenda, he added.

ENERGY SECURITY DRIVES RENEWABLES GROWTH

The energy crisis could be a turning point for accelerating clean sources and for forming a sustainable and secured energy system, Birol said.

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

The IEA has revised up the forecast of renewable power capacity growth in 2022 to a 20% year-on-year increase from 8% previously, with close to 400 gigawatts of renewable capacity being added this year.

Many countries in Europe and elsewhere are accelerating the installation of renewable capacity by cutting the permitting and licensing processes to replace the Russian gas, Birol said.

World is in its 'first truly global energy crisis' - IEA's Birol
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Gyuri Molnár
Gyuri Molnár Oct 25, 2022 12:53PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If Russia halts the crude deliveries for 6 months, crude prices will pop. Itt will heat up inflation and the FED will need to raise rates, or Ms. Market will, prompting THE bond armageddon. This card is in hands as well.
Andrew Ulferts
Andrew Ulferts Oct 25, 2022 8:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Strange how oil prices remain so low, and every oil ticker is red pm.
Jack Peterson
Jack Peterson Oct 25, 2022 7:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Headline should read “Government Controlled Self Inflicted Energy Crisis” period
Sayed Hanif
Sayed Hanif Oct 25, 2022 7:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This energy crisis is indirectly created by US. Ukraine would have used some brain. Still Ukraine can reconcile with Russia and peace can be resumed in Europe. If they take US mediation, then we will have one more tension region like Israel- Palestine
Brad Albright
Brad Albright Oct 25, 2022 7:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When your country is attacked by a marauding invader who drives tens of millions of families to other countries and lays claim to your territory, then you can tell us with some authority about making peace with your attackers. Until then, your opinion lacks any consideration of law, justice or morality.
Brent Oil
Brent Oil Oct 25, 2022 7:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Reconcile with the ******of our time?! Your cynicism is unbecoming.
syafizi sazali
syafizi sazali Oct 25, 2022 7:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
that sounds like what Palestinian have been facing for decades.
Matt luck
Matt luck Oct 25, 2022 5:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bomb OPEC
Andrew Ulferts
Andrew Ulferts Oct 25, 2022 5:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How is this comment allowed on here? You people are sick. Investing.com censors everything, yet allows this!
Brad Albright
Brad Albright Oct 25, 2022 5:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It's repugnant, and not much different from those who cheer Russia under articles about it bombing Ukraine.
Andrew Ulferts
Andrew Ulferts Oct 25, 2022 5:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Brad Albright I am yet to see what you just described.
Brad Albright
Brad Albright Oct 25, 2022 5:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Andrew Ulferts Look in the mirror. You cannot condemn international support for Ukraine, spout conspiracy theories as justification for Russia's attack, defend Russia as a scapegoat and then feign innocence.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email