Today, Friday, the International Energy Agency reported that OPEC + oil producers will need to increase their production in order to meet demand, which is heading to recover, to pre-pandemic levels, by the end of 2022.
The Paris-based agency said that the “(OPEC +) group needs to open the taps so that global markets get adequate supplies,” adding that demand for oil is rising.
And she added, in her monthly report on oil: “In 2022 there is room for the 24 members of the (OPEC +) group, led by Russia and Saudi Arabia, to increase crude supplies by 1.4 million barrels per day above their target, for the period between July 2021 and March 2022.”
The “OPEC +” group agreed in April 2021 to reduce oil production cuts from May to July 2021, and confirmed the decision at a meeting it held on the first of this June.
The agency stated that meeting the demand that has recovered is “not likely to be a problem,” expecting that “OPEC +” will still have an actual spare capacity of 6.9 million barrels per day after July 2021, and that Iran’s talks with world powers may free its oil supplies from US sanctions.
The International Agency said: “If sanctions on Iran are lifted, an additional 1.4 million barrels per day may enter the market in a relatively short time.”
The agency shocked the energy sector with its report entitled “Net Zero Emissions by 2050” issued on May 18, 2021, and stated that investors should not finance new fossil fuel projects if the world wanted to reach its goals to curb emissions that cause warming by the middle of the century.