https://www.miningweekly.com

IEA urges Opec to open the taps as oil market enters 'red zone'

9th October 2018

By: Bloomberg

  

Font size: - +

LONDON – The International Energy Agency made a direct appeal to Opec and other major oil producers to boost output, warning that prices are inflicting damage on the global economy.

“We should all see the risky situation, the oil markets are entering the red zone,” IEA executive director Fatih Birol said Tuesday. “We should try to comfort the markets all together because it may be bad news for the consumers, importers today, but I believe it may well be bad news for the producers tomorrow."

The IEA, which advises most major economies on energy policy, said last week that rising crude prices may dent demand in some of the world’s fastest-growing nations unless producers take steps to boost supplies. Birol has welcomed efforts by top Opec producer Saudi Arabia to increase output, but believes market tightness is likely to persist.

“If there are no major moves from the key producers, the fourth quarter of this year is very, very challenging,” he said in a Bloomberg television interview. Much of the onus lies with Saudi Arabia, as most other members of the Organisation of Petroleum Exporting Countries are producing at, or close to, full capacity.

Birol’s warning follows a 20% surge in crude prices since August as Opec struggles to fill the gap left by tumbling shipments from several members. Iran’s exports have dropped faster than most in the industry expected, with many major buyers halting purchases even before US sanctions are enforced in November. In Venezuela, output has slumped amid economic collapse.

"Demand is still very strong and we’ve been losing oil from Venezuela in big amounts, and also Iran is going down," Birol said. Venezuela’s “free-fall” could drag production below 1 million barrels a day “very soon,” he said. By contrast, Saudi Arabia, currently pumping about 10.7-million barrels a day, could pump 11-million a day, according to the IEA.

“Expensive energy is back at a bad time, when the global economy is losing momentum,” Birol said. “We really need more oil.”

Edited by Bloomberg

Comments

Showroom

Rittal
Rittal

Rittal is a world leading provider of top-quality integrated systems for enclosures, power distribution, climate control, IT infrastructure and...

VISIT SHOWROOM 
AutoX
AutoX

We are dedicated to business excellence and innovation.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.111 0.145s - 90pq - 2rq
Subscribe Now