On Monday, the chief director of the International Energy Agency spoke about the intricacies of the energy transition and the dashing challenges that will need to be balanced in the years ahead.
The chief director of the International Energy Agency spoke of the rush challenges facing global oil markets on Monday, displaying the significant influence Chinese demand could have over few months.
Davos, Switzerland, Fatih Birol composed a stark picture of the current situation, identifying the oil prices as being hyped up .
They are dangerous for economic recovery around the globe , exclusively in the importing countries in the approaching world. “It’s a very big drawback , together with the food costing being very high, and thinking that it may well trigger the world … step by step to a recession.
With geopolitical stress elevated following Russia’s invasion of Ukraine and continued concerns about supply casting a shadow over oil markets, the price of Brent crude currently sits at around $114 a cask .
Moreover , Birol went on to lay out some of the objections markets may face in the coming months.
“Otherwise, we have only one hope that we don’t have big trouble in the oil markets in summer, which is hoping … that the Chinese demand remains very weak.”
Chinese oil demand exhausted in recent months as the country imposed a number of binding lockdowns in a bid to curb the spread of Covid-19.
Birol was also asked about the “excessive ” profits being made by a lot of hydrocarbon based companies — as well as exploration companies — and what should be done with them.
Hence , their response illustrated the intricacies of the global energy transition and the competing challenges that will need to be balanced in the years ahead.
“In the last five years, on average, [the] oil and gas industry made revenues [of] about $1.5 trillion,” he said.
“And this year, from 1.5 it will go to 4 trillion U.S. dollars, more than two times increase in the oil and gas companies’ revenues.”
It was not only businesses that were making money, he added, namechecking countries such as Saudi Arabia, Iraq, Iran, Russia, Angola and Nigeria.
“Of course, money should go, in my view, to replace the Russian oil and gas, in terms of the traditional assets,” Birol said.
“But I very much hope that money also goes to clean energy, clean and secure energy technologies, ranging from solar, wind, carbon capture and storage, hydrogen.”