The International Energy Agency (IEA) has called on governments to urgently implement measures to cut global oil consumption within months following supply fears stemming from Russia's invasion of Ukraine.
The outbreak of war in Ukraine has sent fuel prices up sharply and led to major economies, such as the United States and Canada, sanctioning Russia by banning imports of oil.
The IEA warned earlier this week of the risk of a global supply crisis as major oil companies, trading houses, shipping firms and banks have shunned Russia.
If supplies of Russian oil are cut even more, "there is a real risk that markets tighten further and oil prices escalate significantly in the coming months" as the world enters its peak demand season, the IEA said.
10-point plan
In a report released Friday, the IEA put forward 10 proposals, together with the French government, which could cut oil consumption among advanced economies "by 2.7 million barrels a day within the next four months".
The countries currently consume between 44 and 45 million barrels a day, according to IEA estimates.
Together the world's advanced economies account for "around 45 percent of global oil demand", the IEA said.
The proposals, principally targeted at transport, included reducing speed limits, working from home three days a week, car-free Sundays, cheaper public transport and greater use of long-distance trains over planes.
We’ve just released the @iea 10-Point Plan on actions advanced economies can adopt to cut oil demand by 2.7 million barrels a day. This would be a big saving - it's the same amount of oil currently consumed by all of the cars in China. pic.twitter.com/Hf0bzM9dJX
— Christophe McGlade (@TofMcGlade) March 18, 2022
OPEC under pressure
The IEA also called on the OPEC+ group of oil-producing nations led by Saudi Arabia and Russia to help "relieve the strain" on markets, while warning that the world faced the biggest shock to supply "in decades".
However, increases in the supply of oil "would not be able to ease the current strains" after the "disappointing outcome" of a recent monthly meeting of OPEC+, the IEA report concluded.
The OPEC+ group has resisted US pressure to step up production for months, agreeing only to modest increases in output at its regular meetings, even after Russia invaded Ukraine.
The IEA was hoping for "some good messages which could help to relieve the strain on the oil markets" after the group's next meeting on 31 March, IEA Executive Director Fatih Birol said at Friday's press conference to present the plan to cut demand.
(with AFP)
