OPEC Says IEA Commentary on Oil Security Encouraging

DUBAI: The oil producer group OPEC expressed encouragement over a commentary from the International Energy Agency (IEA), which highlighted the significance of oil security. However, there remains a considerable gap between their perspectives on the demand outlook.

"The world's reliance on oil is diminishing, yet it is still deeply entrenched. Consequently, disruptions in supply can inflict severe economic damage and adversely affect people's lives," stated the IEA in a commentary by energy security analyst Ronan Graham and researcher Ilias Atigui, published on Monday.

The commentary addressed the high level of uncertainty regarding the rate at which demand will decline, presenting oil companies with challenging and commercially precarious decisions concerning upstream investment. It noted that such uncertainty around investment heightens the risk of an imbalance between supply and demand.

"At OPEC, we find this message reassuring and appreciate the acknowledgment of oil's enduring significance to the world," responded the Organization of the Petroleum Exporting Countries.

OPEC added that calls from the IEA for a cessation of new investments in oil and natural gas have "significantly contributed to this uncertainty."

The two entities hold vastly different projections for oil demand this year and beyond. The IEA anticipates demand will reach its zenith by 2030, whereas OPEC's forecasts, extending to 2045, do not predict a peak.

Their positions are more divergent than at any point in at least the past 16 years, as reported by Reuters this week.

At December's COP28 climate summit in Dubai, nearly 200 countries concurred that transitioning away from fossil fuels is imperative for the world.

Representing industrialized nations, the IEA contends that bolstering clean energy is the most efficacious strategy for governments to enhance energy security.