The International Energy Agency (IEA) believes the risk that conflict in the Middle East could cause problems with oil supplies remains “high”, it announced this Thursday.
In its monthly oil market report published this Thursday, the IEA emphasizes that the first impact will be higher prices in Europe, which will impact European markets.
Barring these potential flow incidents, the market this year “appears to be fairly well supplied” and this is due to the fact that several non-OPEC+ producing countries will supply production that will far exceed demand growth. says the IEA.
These countries are the United States, Brazil, Guyana and Canada, which will only increase production by 1.3 million barrels per day of the 1.5 million projected among all producers.
On the other hand, the contribution of OPEC+, that is, members of the Organization of the Petroleum Exporting Countries and their partners, namely Russia, will remain at the same level.
At the same time, demand growth will slow from an additional 2.3 million barrels per day in 2023 to 1.2 million in 2024, with consumption at a record 103.5 million barrels per day.
This increase of 1.2 million barrels per day represents an upward revision of 180,000 barrels per day from last month’s forecasts, an adjustment driven by the stimulating effect of low oil prices in the last quarter of 2023 as well as a slight improvement in the economic environment . forecast in anticipation of lower interest rates.
In any case, this does not call into question the slowdown in demand in 2024 compared to 2023, which is mainly explained by the end of the recovery effect from the Covid crisis, which caused strong growth in 2023, more than threefold. a quarter of which was caused by China.
It is also due to the economic slowdown in some important regions, especially in the developed world, as well as the impact of energy efficiency measures and the growing adoption of electric vehicles.
The main cause of concern for the IEA, which brings together the main energy-consuming countries of the developed world, is the impact of the war in the Gaza Strip and, in particular, its spread to the Red Sea with attacks by Houthi rebels. from Yemen, which threaten maritime traffic in the Gulf of Aden and the armed response of the US-led coalition.
IEA experts say some container ships and oil tankers are avoiding the Red Sea and Suez Canal route, which they estimate could see oil flows cut by nearly two-thirds by the end of January.
It must be taken into account that in 2023, about 10% of oil flows in one direction or another passed through the Suez Canal.
Sending these ships, especially around the Cape of Good Hope and around the African continent, means adding about two weeks to their route, increasing transport costs and potentially disrupting supply chains.
The agency stresses that if this re-routing situation continues, it could affect prices for petroleum products in Europe, adding that in addition, “Mediterranean markets could be severely affected” by increased transport times.
However, the AEI guarantees that it is ready to “react decisively in the event of a supply disruption” and the need to place more oil on the market.
In this regard, the IEA emphasizes that its members have reserves of about four billion barrels, of which 1,200 million are under the control of their governments in case of emergency.
Author: Lusa
Source: CM Jornal
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