“‘The world is in the middle of its first truly global energy crisis.’”
That observation comes from Fatih Birol, executive director of the International Energy Agency, the Paris-based organization that represents the world’s largest oil-consuming countries, in remarks at an energy conference in Singapore, according to news reports.
Birol blamed tightening markets for liquefied natural gas, or LNG, and the decision by major oil producers to cut production for the dire straits, Reuters reported. The decision by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to cut production by 2 million barrels a day was a risky decision because the IEA sees global demand growth at around that level for this year, he said.
The move is “especially risky as several countries around the world are on the brink of recession, if that we are talking about the global recession…I found this decision really unfortunate,” Birol said, according to Reuters.
Oil futures were lower on Tuesday, with West Texas Intermediate crude for December delivery CL.1, -1.15% CLZ22, -1.15%, the U.S. benchmark, down 1.3% near $83.50 a barrel, while Brent crude BRN00, -1.00% BRNF23, -1.00%, the global benchmark, was off 1.1% at $90.17 a barrel. WTI is down 33% and Brent is off nearly 37% from March highs seen after Russia’s late-February invasion of Ukraine. Crude has been stuck in a trading range in recent weeks.