IMG.gif

IEA: Boost Supply, Cut Cars to Curb Russian Oil Use

Copyright © 2022 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.
AP_19317376692092-people-fatih-birol

The International Energy Agency (IEA) is asking people to drive and fly less in order to curb their reliance on Russian oil but the group’s head also hinted he would like Opec producers to boost supply.

The IEA claimed its 10-point plan could lower global oil demand by 2.7 million barrels per day within four months by changing transport patterns and consumer behavior.

The plan is a response to the ongoing Russian invasion of Ukraine, which has thrown global oil and gas markets as well as other major commodity markets into turmoil as countries scramble to limit their exposure to Russia.

The Paris-based IEA believes that practical actions taken by developed economies could achieve significant reductions in oil demand within a few months, reducing the risk of a supply crunch.

The IEA’s plan calls for lower speed limits, working from home, limits on car access to city centers, cheaper public transport, carpooling and other initiatives. It also calls on travelers to make greater use of high-speed rail and replace business travel with virtual meetings.

“These efforts would reduce the price pain being felt by consumers around the world, lessen the economic damage, shrink Russia’s hydrocarbon revenues, and help move oil demand towards a more sustainable pathway,” the IEA said in its report.

More Supply, Faster Transition

During the press conference IEA Executive Director Fatih Birol said oil consumers were “disappointed” that the Opec-plus producers’ group had not chosen to boost supply above the monthly scheduled increment of 400,000 b/d.

He suggested that he would like to see a different outcome from the group's next meeting on Mar. 31.

“I hope there will be good messaging to relieve the strains on markets,” he said,

IEA member countries already agreed to support the global economy with an initial release of 60 million barrels of oil from strategic stockpiles to counter fears of a supply shortfall as a result of the war in Ukraine.

Looking beyond the near-term impacts of the measures recommended by the IEA, the long-term solution remains reducing global reliance on oil and gas for energy, politicians said.

“France and all European countries must get out of their dependence on fossil fuels, in particular on Russian fossil fuels, as soon as possible,” French Minister for the Ecological Transition Barbara Pompili said during an event to present the plan. “It is an absolute necessity, for the climate but also for our energy sovereignty."

Like the IEA’s previous 10-point plan to reduce Europe’s dependency on Russian gas, some of the agency’s ideas to reduce Russian oil dependency were already in line with the direction of EU policy, Pompili said.

Next week, US Secretary of Energy Jennifer Granholm will chair a meeting at the IEA with energy ministers from the agency’s 31 member countries and partners in Paris to discuss accelerating clean energy investment.

The IEA’s 10-Point Plan to Reduce Russian Oil Use

  • Reduce speed limits on highways by at least 10 kilometers per hour
  • Work from home up to three days a week where possible
  • Car-free Sundays in cities
  • Make the use of public transport cheaper and incentivize micromobility, walking and cycling
  • Alternate private car access to roads in large cities
  • Increase car sharing and adopt practices to reduce fuel use
  • Promote efficient driving for freight trucks and delivery of goods
  • Using high-speed and night trains instead of planes where possible.
  • Avoid business air travel where alternative options exist
  • Reinforce the adoption of electric and more efficient vehicles
Topics:
Oil Supply, Sanctions, Oil Demand, Military Conflict, Opec-Plus Supply , Ukraine Crisis
#
Opec-plus crude oil production surged by 1 million b/d in July, largely thanks to a recovery in the output of Kazakhstan, Nigeria, and Libya.
Thu, Aug 11, 2022
Production at several US Gulf platforms was halted on Thursday, but the stoppage is currently not expected to last long.
Thu, Aug 11, 2022
Supplies are rebounding while recessions worries and price inflation are making demand wobbly.
Thu, Aug 11, 2022