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

SINGAPORE, Oct 25 (Reuters) – Tight markets for liquefied natural gas (LNG) worldwide and supply cuts by major oil producers have put the world in the middle of a “truly global energy crisis”. Daya Hai, head of the International Energy Agency (IEA). said on Tuesday.

IEA Executive Director Fateh Barul said in Singapore that increased LNG imports to Europe amid the Ukraine crisis and a possible recovery in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters next year. New LNG capacity will come on the market. 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 production by 2 million barrels per day (bpd) is a “dangerous” decision because the IEA Looks at oil globally. Birol said demand increased by about 2 million bpd this year.

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“(It’s) particularly dangerous because many economies around the world are on the brink of recession, if we’re talking about a global recession … I find this decision really unfortunate,” he said. said

Rising global prices for a range of energy sources, including oil, natural gas and coal, are hurting consumers at a time when they are already dealing with rising inflation in food and services. The prospect of higher prices and rationing is potentially dangerous for European consumers as they prepare to enter the Northern Hemisphere winter.

If the weather stays mild, Europe could get through this winter, albeit somewhat harshly, Birol said.

“Unless we have a very cold and long winter, there will be no surprises in terms of what we’ve seen, for example the explosion of the Nord Stream pipeline, Europe this winter. Some have to go with economic and social injuries,” he added.

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

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The G7 countries have proposed a mechanism that would allow emerging nations to buy Russian oil but could buy Moscow’s revenue at lower prices in the wake of the Ukraine war.

Birol said the scheme still has many details to work out and will require buy-in from major oil-importing countries.

A US Treasury official told Reuters last week that it was not unreasonable to believe that 80% to 90% of Russian oil would continue to fall outside the price ceiling if Moscow were to violate it.

“I think it’s good because the world still needs Russian oil to come into the market. 80%-90% is a good and encouraging level to meet demand,” Birol said.

He added that while there are still huge oil reserves that could be tapped during supply disruptions, another release is not currently on the agenda.

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Energy security drives renewable development.

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

“Energy security is the number one driver (of the energy transition),” Birol said, as countries look to energy technologies and renewables as solutions.

The IEA has revised its forecast for renewable electricity capacity growth to 20% year-on-year growth in 2022 from 8% previously, with around 400 gigawatts of renewable capacity being added this year.

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

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Reporting by Florence Tan, Miu Su and Emily Chu; Edited by Jacqueline Wong and Christian Schmollinger

Our Standards: Thomson Reuters Trust Principles.

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