OPEC+ oil producers will need to increase their production to meet demand set to recover to pre-pandemic levels by the end of 2022, the International Energy Agency said on Friday.
“OPEC+ needs to turn on the taps to keep world oil markets adequately supplied,” the Paris-based energy agency said, adding that rising demand and countries’ short-term policies were at odds with the appeal of the IEA to end new oil, gas and coal financing in a stern report issued last month. see More information
“By 2022, there is room for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to increase oil supply by 1.4 million barrels per day (bpd) above its July 2021-March target of 2022,” said the monthly oil report.
OPEC+ agreed in April to gradually reduce oil production cuts from May to July and confirmed the decision at a meeting on June 1st.
Meeting the restored demand “will likely not be a problem,” the IEA said, predicting that OPEC+ will still have 6.9 million bpd of effective spare capacity after July and that Iran’s talks with world powers could free up its supply of oil from US sanctions.
“If sanctions on Iran are lifted, an additional 1.4 million bpd could be placed on the market in a relatively short time frame.”
The IEA shocked the energy industry with its “Net zero to 2050” report on May 18, saying investors shouldn’t fund new fossil fuel projects if the world wants to meet targets for curbing emissions that cause rising temperatures until mid-century.
“This roadmap shows that most of the countries’ pledges are not yet supported by short-term policies and measures,” the IEA said on Friday.
“Oil demand looks set to continue to increase, underlining the enormous effort needed to get on the path to achieving stated ambitions.”
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