World faces "1st true energy crisis" as oil consumption set to rise to 1.7mln bpd:IEA

• Financial

Chief of Paris-based International Energy Agency (IEA), Birol, said in an interview on Tuesday that a supply bottleneck coupled with an OPEC+ decision to slash their output by 2 million bpd (barrels per day) or around a 2 per cent of world’s entire crude oil output per day, had yielded the world’s first major “energy crisis”.

In point of fact, latest remark from IEA Chief Birol came against the backdrop of a decision from 14-member OPEC (Organization of Petroleum Exporting Countries) alongside their Russia-backed allies to trim output by 2mln bpd at their first in-person meet since 2020 amid an ongoing supply-crunch.

On top of that, a number of Eurozone nations appeared to have chosen to purchase costly natgas alongside other measures to fill up the void left by a malfunctioned Nord Stream 1 pipeline. However, Birol said that global oil consumption is expected to rise by 1.7 million barrels per day next year, vindicating EU member’s disunion to reach a conclusive decision on Russian natgas.

Nonetheless, many energy analysts were quoted saying that the crises would deepen further next year.

IEA’s Birol says world is facing its first true energy crisis

Apart from a cataclysmic supply-crunch, an increase in China’s appetite for fuel following an ease in pandemic quarantine laws would likely to dampen the supply outlook further.

Meanwhile, branding the OPEC+ decision to slash output by 2 million bpd as “risky,” 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.

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”.