(Reuters) – Oil producer group OPEC said on Wednesday it was encouraged by a commentary from the International Energy Agency (IEA) which underscores the importance of oil security, while the two remain far apart on the demand outlook.
“While the world’s dependence on oil is lessening, it remains deep-rooted, so supply disruptions can still cause significant economic harm and have a substantial negative impact on people’s lives,” the IEA said in a commentary written by energy security analyst Ronan Graham and researcher Ilias Atigui released on Monday.
“There is a high degree of uncertainty around how quickly demand will fall, leaving oil companies facing difficult and commercially risky decisions around upstream investment,” it said, adding investment uncertainty raises the risk of a supply-demand imbalance.
“At OPEC, we are encouraged by this message and the reference to the continuing importance of oil to the world,” the Organization of the Petroleum Exporting Countries said in response.
It added that the IEA’s calls for no new investments in oil and natural gas, have “contributed significantly to this uncertainty”.
The two sides have widely diverging views on oil demand for this year and beyond. IEA expects demand to peak by 2030 while the oil producers of OPEC see no peak in their forecasts, which stretch out to 2045.
Their views are further apart than they have been for at least 16 years, Reuters reported this week.
Almost 200 countries at December’s COP28 climate summit in Dubai agreed that the world needs to transition away from fossil fuels.
The IEA, which represents industrialised countries, argues that increasing clean energy is the most effective way for governments to boost energy security.
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