LONDON: The International Energy Agency (IEA) warned on Tuesday that stalled discussions between top oil producers over releasing additional supply might devolve into a price war at a time when demand for oil is soaring because to COVID-19 vaccines. “The prospect of a market share war, however remote, hangs over markets, as does the risk of high fuel prices stoking inflation and jeopardizing a fragile economic recovery,” the Paris-based agency said.
“Because of the OPEC+ impasse, production quotas will remain unchanged until a compromise is reached. As demand recovers from last year’s COVID-induced slump, oil markets will tighten dramatically “In its monthly oil market analysis, it stated. After days of negotiations, OPEC+, which includes producers from the Organization of Petroleum Exporting Countries, Russia, and others, was forced to leave talks on expanding production last week due to a conflict between Saudi Arabia and the United Arab Emirates. Though mounting virus cases in some nations represent a critical downside risk, oil storage levels in most affluent countries have fallen well below historical averages, and oil stock pulls this autumn are expected to be the highest in at least a decade, according to the IEA. “Oil prices are likely to continue volatile until OPEC+’s output policy is clarified. And volatility does not aid in the orderly and secure transfer of energy – nor does it serve the interests of either producers or consumers “the International Energy Agency (IEA) added.
(Nathan Browning contributed reporting, and Jason Neely edited the piece.)/n
