The planet is experiencing its "first truly global energy crisis"

The contraction in the liquefied natural gas (LNG) market and the reduction in OPEC's crude supply have led the world to "the first truly global energy crisis," Fatih Birol, executive director of the International Agency for Energy, warned on Tuesday.

NewsEditor
NewsEditor
25 October 2022 Tuesday 05:44
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The planet is experiencing its "first truly global energy crisis"

The contraction in the liquefied natural gas (LNG) market and the reduction in OPEC's crude supply have led the world to "the first truly global energy crisis," Fatih Birol, executive director of the International Agency for Energy, warned on Tuesday. the Energy (IEA).

Rising world prices for various energy sources, including oil, natural gas and coal, are hitting consumers who are already coping with rising food and service inflation.

In this context, the greater imports of LNG to Europe in the midst of the crisis due to the war in Ukraine and a possible rebound in Chinese appetite for fuel will contribute to a scarcity of resources in the market, since next year only 20,000 million will be added cubic meters of new capacity, he said from the Singapore International Energy Week.

Added to this is the recent decision by OPEC and its allies to cut two million barrels of production per day, a "risky" measure since the institution expects demand to grow by the same amount this year. "Several economies around the world are on the verge of a recession, if we are not talking about a global recession... This decision seems really unfortunate to me," he stressed.

Thus, the world will continue to need Russian oil to meet demand. According to their figures, if 10% or 20% of Russian crude is withdrawn from the market, it will still allow demand to be covered.

High prices and the possibility of rationing are a factor to be taken into account among European consumers, who are preparing to enter winter. Europe can get through this winter, albeit with a wound, if the weather continues to be moderate, Birol predicted.

As an alternative to the current situation, the director of the OECD agency has pointed out that the energy crisis can be a turning point to accelerate clean energy sources and to form a sustainable and secure energy system. "Energy security is the number one driver of the energy transition," he said.

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