Fatih Birol (executive director of the International Energy Agency) has a history of critiquing oil and gas investments. He expressed dismay in the Organization of Petroleum Exporting Countries and a group of allies headed by Russia for cutting oil production during what he called a “truly global oil crisis.”
The IEA recommended nearly a year ago that no new oil and gas facilities worldwide be built as part of a plan to reach net zero carbon emissions by 2050. Despite this, Birol said that the ongoing energy crisis triggered by Russia’s invasion in Ukraine was “truly global” and expressed disappointment Tuesday at OPEC+’s decision to reduce oil production by 2,000,000 barrels per day.
Birol said that OPEC+ was “extremely risky” because many economies are at the brink or in danger of falling into recession. Reuters also reported Birol’s comments about the decision. “I found this decision very unfortunate.”
According to The Guardian, Birol previously warned against the investment in fossil fuels to address the energy crisis. He cited the time required to build new oil refineries and LNG processing plants. However, he also stated that he hoped countries capable of exporting more fossil fuel-based energy would be a positive contributor to the resolution of the crisis. This is because short-term energy needs would not be met by alternative energy sources alone, according to Reuters.
Europe’s energy supply has been under increased pressure after the sabotage and disruption of the Nord Stream pipeline. This pipeline was first discovered in September and rendered it unable deliver Russian natural gas to Europe. Already in September, Russia’s threat of cutting off access to the resource led to the European Union (EU), urging citizens to reduce their consumption.
Birol suggested that a G7 plan would be approved that would allow emerging countries to buy Russian oil at lower prices to help them secure enough oil. However, Reuters reported that Birol did not endorse the details. He stated that Russia could sell between 80% and 90% of its oil supplies to stabilize oil supplies without the need for additional strategic oil reserves.