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OPEC Is Encouraged By The IEA’s Commentary On Oil Security

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OPEC Is Encouraged By The IEA's Commentary On Oil Security

(CTN News) – In a statement on Wednesday, the Organization of Petroleum Exporting Countries (OPEC) said it is encouraged by a comment from the International Energy Agency (IEA) which emphasizes the importance of oil security, however the two remain at a distance when forecasting the demand situation.

As the IEA wrote in a commentary released on Monday, the world’s dependence on oil is decreasing. However, it remains deeply embedded, so disruptions to its supply can still cause significant economic harm and a substantial negative impact on people’s lives. The commentary, written by OPEC Ronan Graham and Ilias Atigui, was released on Monday by the IEA.

Oil companies face difficult and commercially risky decisions about how to invest in upstream assets, as there is a high degree of uncertainty about how rapidly demand will fall, it said, adding that investment uncertainty raises the risk of a supply shortage in the near future.

A statement from the OPEC Organization of the Petroleum Exporting Countries said that they are encouraged by this message and the reference to the continuing importance of oil to the global economy.

IEA’s calls for no new investments in oil and natural gas have, according to the report, “significantly contributed to the rise in uncertainty with regard to oil and natural gas prices”.

There is a wide divergence of opinion between the two sides on the future demands for oil in this year and the next.

In its estimates, the OPEC IEA expects oil demand to peak by 2030. In contrast, OPEC’s forecasts, which extend out to 2045, do not indicate any peak in oil demand.

This week, Reuters reported that their views are further apart than they have been in at least 16 years, according to the news agency.

As a result of OPEC COP28, which took place in Dubai in December, almost 200 countries have agreed that the world needs to make the transition to renewable energy sources to fight climate change.

It is widely believed that governments can boost energy security by implementing a policy that increases clean energy, according to the International Energy Agency, which represents industrialised countries.

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