IEA Calls for More Production Baffling the Oil Market

In its most recent Monthly Oil Report, the IEA urged OPEC+ to boost output to meet rising demand in 2022. According to the organization, demand for crude oil and petroleum products will approach pre – COVID levels by 2022, given current global economic growth estimates. “OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” according to the Paris-based energy watchdog, which has come under criticism after its stunning Net-Zero by 2050 report called for no new investments in oil and gas.

At the same time, the IEA has stated that market realities contradict its recommended plans for achieving net-zero emissions by 2050. The “former” leading oil and gas organization is sure to face strong criticism, as it has urged the world to double down on renewables and adhere to the Paris Agreement while acknowledging that the global economy continues to consume massive volumes of hydrocarbons.

Some of these papers’ relevance will have to be reconsidered, particularly the high-profile “Golden Age of Gas” report and the “Net Zero by 2050” plan. When asked what has to be done, the IEA stated that the call on OPEC+ would be powerful, as the worldwide club of oil and gas producers will need to raise crude oil supply to the market by 1.4 million barrels per day (BPD) by 2022.

This would represent a significant increase above the current goal of July 2021 to March 2022. The IEA demand forecasts align with those of others since OPEC, the EIA, and independent consultants have already stated that oil consumption will rise significantly. Even though costs are multiplying, some predict that volume will be higher in 2022 than in 2019.