Give up your car and start walking. That’s an order. The International Energy Agency (IEA) on Friday directed global governments to urgently cut oil supply to domestic consumers and encourage compliance with its call for lowered consumption.
The IEA 10-point plan to drive “changes in the behaviour of consumers” and reduce gas demand at the pump includes reducing speed limits, working from home three days a week, more electric cars, car-free Sundays, more cycle lanes, cheaper public transport and greater use of long-distance trains over planes.
The IEA also called on the OPEC+ group of oil-producing nations led by Saudi Arabia and Russia to help “relieve the strain” on markets, while warning that the world faced the biggest shock to supply “in decades.”
The outbreak of war in Ukraine has already led to major economies, such as the United States and Canada, sanctioning Russia by banning imports of oil as prices soar accordingly.
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The IEA warned earlier this week of the risk of a global supply crisis as major oil companies, trading houses, shipping firms and banks have shunned Russia, AFP reports.
With the threat that supplies of Russian oil could disappear, “there is a real risk that markets tighten further and oil prices escalate significantly in the coming months” as the world enters its peak demand season, the IEA said.
“As a result of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades, with huge implications for our economies and societies,” IEA Executive Director Fatih Birol said in a statement.
Increases in supply of the crucial commodity “would not be able to ease the current strains” after the “disappointing outcome” of a recent monthly meeting of OPEC+, the IEA report concluded.
The OPEC+ group has resisted U.S. pressure to lift production for months, agreeing only to modest increases in output at its regular meetings, even after Russia invaded Ukraine.
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The IEA was hoping for “some good messages which could help to relieve the strain on the oil markets” after the group’s next meeting on March 31, Birol said at a press conference to present a plan to cut demand.
The measures, put forward together with the French government, could reduce consumption among those countries by 2.7 million barrels a day, while these currently consume between 44 and 45 million barrels a day, the IEA claimed.
Story cited here.
