A rise in energy demand during the summer could send oil prices even higher and force the world economy into a recession, the head of the International Energy Agency has warned.
Fatih Birol, Executive Director of the International Energy Agency (IEA), said oil producers need to act responsibly to help rein in oil prices. Otherwise, there’s a risk of a global recession. “If we don’t make a positive contribution here, we may see prices even going higher, being much more volatile and becoming a major risk for a recession for the global economy,” Birol said in an interview with Bloomberg TV from Davos – where the World Economic Forum (WEF) 2022 is underway,” Birol said.
On Monday, Fatih Birol told Bloomberg TV that all participants in energy markets need to make a “positive contribution” to ensure that prices don’t spike. Here is a statement, “This summer will be difficult because in summer, as we know, the oil demand normally goes up in peak driving season,” Birol told Bloomberg TV during an interview at the World Economic Forum’s meeting in Davos, Switzerland.
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His words come in the context of a substantial rise in global energy costs resulting from Russia’s invasion of Ukraine. Western countries are trying to trim their reliance on Russian energy, with the European Union trying to get an agreement on a total ban of oil imports from the government.
Birol said these efforts were necessary to punish Russia but warned they increased the risks for energy markets and the world economy.
Brent crude oil was up 1.06% Monday to $113.74 a barrel, having started the year below $80. WTI crude was 0.91% higher at $111.28 a barrel.
