Tweet
KAKE - OPEC may soon lose its sway over global oil prices, IEA says
A looming glut in global oil supply could “upend” attempts by the Organization of the Petroleum Exporting Countries and its allies, or OPEC+, to prop up prices by cutting production, according to the International Energy Agency.
The Paris-based IEA said Wednesday that it expects growth in global oil production — led by the United States and other countries in the Americas — to “inflate the world’s spare (oil) capacity cushion” to levels seen only once before, during the coronavirus pandemic when oil prices crashed.
By 2030, global oil supply will outstrip demand by a “staggering” 8 million barrels per day, according to forecasts published by the agency in its medium-term oil market report.
“(That’s) a major, major surplus and… might be one of the highest in the history,” Fatih Birol, the IEA’s executive director, told reporters.
That surplus “could upend the current OPEC+ market management strategy aimed at supporting prices,” the agency said in its report, adding that the glut could result in a “lower-price environment.”
OPEC, which has allied itself with Russia and other producers, did not immediately respond to a CNN request for comment.
The IEA also forecast growth in global oil demand to “slow progressively” over the rest of the decade, with demand peaking by 2029 before contracting slightly the year after.
The agency said the accelerating deployment of clean energy technologies, including “surging EV sales,” would be one of the main reasons for the slower growth in oil demand.
The Paris-based IEA said Wednesday that it expects growth in global oil production — led by the United States and other countries in the Americas — to “inflate the world’s spare (oil) capacity cushion” to levels seen only once before, during the coronavirus pandemic when oil prices crashed.
By 2030, global oil supply will outstrip demand by a “staggering” 8 million barrels per day, according to forecasts published by the agency in its medium-term oil market report.
“(That’s) a major, major surplus and… might be one of the highest in the history,” Fatih Birol, the IEA’s executive director, told reporters.
That surplus “could upend the current OPEC+ market management strategy aimed at supporting prices,” the agency said in its report, adding that the glut could result in a “lower-price environment.”
OPEC, which has allied itself with Russia and other producers, did not immediately respond to a CNN request for comment.
The IEA also forecast growth in global oil demand to “slow progressively” over the rest of the decade, with demand peaking by 2029 before contracting slightly the year after.
The agency said the accelerating deployment of clean energy technologies, including “surging EV sales,” would be one of the main reasons for the slower growth in oil demand.
Comment