IEA: Energy crisis threatens global recovery

A global energy crunch is expected to boost oil demand by 500,000 barrels per day and could stoke inflation and slow the world’s recovery from the COVID-19 pandemic, the International Energy Agency warned on Thursday.

Oil and natural gas prices have soared to multi-year highs recently, sending power prices surging to record levels as widespread energy shortages hit Asia and Europe.

IEA ‘s monthly oil report has said that record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming.

“Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery”, the report added.

As a result, global oil demand next year is now projected to recover to pre-pandemic levels, the Paris-based agency said.

It made upward revisions to its demand forecasts for this year by 170,000 bpd, or a total addition of 5.5 million for the year, and by 210,000 bpd in 2022, or a total addition of 3.3 million.