World is in its 'first truly global energy crisis': IEA chief Fatih Birol

Tightening markets for liquefied natural gas (LNG) worldwide and major oil producers cutting supply have put the world in the middle of “the first truly global energy crisis”, the head of the International Energy Agency (IEA) said on Tuesday. Rising imports of LNG to Europe amid the Ukraine crisis and a potential rebound in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters of new LNG capacity will come to market next year, IEA Executive Director Fatih Birol said during the Singapore International Energy Week. 

At the same time the recent decision by the Organisation of the Petroleum Exporting Countries (Opec) and its allies, known as Opec+, to cut 2 million barrels per day (bpd) of output is a “risky” decision as the IEA sees global oil demand growth of close to 2 million bpd this year, 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,” he said.

The head of the International Energy Agency said its members have oil reserves available to conduct another round of releases if needed. “We still have huge amount of stocks to be released in case we see supply disruptions. Currently it is not on the agenda, but it can come anytime,” Birol said. “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,” he added.