2024-03-13 15:24:15
The Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that it is encouraged by estimates from the International Energy Agency that highlight the importance of oil security, but the wide discrepancy in the expectations of both sides regarding demand still persists.
The estimates by the International Energy Agency, which advises industrialized countries, follow disagreements between it and OPEC in the past few years over issues such as long-term oil demand and the need for new investments.
“At the Organization of the Petroleum Exporting Countries, we are encouraged by this message and the reference to the continuing importance of oil to the world,” OPEC said.
The two sides have very different views regarding estimates of oil demand this year onwards. The International Energy Agency expects demand to peak by 2030, while OPEC oil producers see no peak in their forecasts that extend to 2045.
“While the world’s dependence on oil is declining, it remains entrenched, so supply disruptions might still cause significant economic damage and “It has a huge negative impact on people’s lives.”
The agency added, “There is a high degree of uncertainty regarding how quickly demand will decline, leaving oil companies facing difficult and commercially risky decisions regarding investing in upstream operations.” It noted that uncertainty in investment increases the risk of an imbalance between supply and demand.
She added that the International Energy Agency’s calls not to direct new investments in oil and natural gas “contributed significantly to this state of uncertainty, which has the potential to lead to major chaos in the energy field, and not the desired energy security.”
Reuters reported this week that the views of the two sides are now more distant than they were at least 16 years ago.
The OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, decided in 2022 to stop using IEA data when assessing the state of the oil market.
Nearly 200 countries agreed at the United Nations COP28 climate conference, hosted by Dubai last December, that the world needs to transition away from fossil fuels.
The International Energy Agency said in 2021 that investors should not finance new projects related to oil, gas and coal supplies if the world wants to reach net zero emissions by mid-century, a shift from previous calls for more investment.
OPEC said, “OPEC has continually affirmed its commitment to the stability of the oil market and security of supplies, and this includes its members maintaining surplus capacities at their own expense in the event of any unexpected interruption in global oil supplies.”
The International Energy Agency says increasing the use of clean energy is the most effective way for governments to enhance energy security.
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