IEA warned of the danger of maintaining high oil prices

The International Energy Agency believes that high oil prices can continue in the near future, and this will threaten global economic growth.

Photo: Nick Oxford / Reuters

The International Energy Agency dropped demand for oil this year and in subsequent years as a result of increased threats to global economic growth. At the same time, the IEA warned that a reduction in the reserve supply of oil would maintain high prices. This is in a study by an agency called "The Future of Petrochemistry", excerpts from this document are given on the IEA website.

The IEA has lowered its estimate of global oil demand in 2018 and 2019 by about 110 thousand barrels per day compared to the previous forecast. So, according to experts, the growth this year will be 1.3 million and following – 1.4 million barrels per day.

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The "threat to economic growth" at the IEA was called "the return of expensive energy". "For many developing countries, higher prices are accompanied by the depreciation of national currencies against the US dollar, making the threat of economic damage more acute," experts say.

The IEA study indicates that the rise in prices was influenced by the threat of new sanctions against Iran. At the same time, analysts indicate that some countries, including Saudi Arabia and key representatives of the Organization of Oil-exporting Countries (OPEC), have already responded to the call to increase production. According to experts, the increase in production was due to the free production capacity, which in the meantime continues to fall. Further reduction will put the market under pressure.

At the same time, the IEA noted that three countries – Iran, Mexico and Venezuela – have reduced production by 575 thousand barrels per day.

IEA director Fatih Birol pointed out this week in an interview with Bloomberg that oil prices "enter the red zone". "Today it can just be bad news for consumers, importers and tomorrow it can be bad news for producers," he said.

Last week, amid investors' fears that US sanctions on Iranian oil exports would leave the deficit markets this year, the cost of a Brent barrel on the London Stock Exchange rose to its highest point in four years. the $ 85. Then the market situation was corrected. In the afternoon of 12 October, Brent's barrel is trading in the range of $ 80.24-81.45.