Oil Price
Congress leaders from the Republican Party have sent a letter to Fatih Birol, the executive director of the International Energy Agency, expressing concern that the IEA has strayed from its core mission of promoting energy security.
Senate Energy and Natural Resources Committee ranking member John Barrasso (Wyo) and House Energy and Commerce Committee Chair Cathy McMorris Rodgers (Wash) wrote in the letter that the agency has been undermining energy security by discouraging enough investment in oil, natural gas, and coal.
“Until recently, the IEA has served as a valuable source of reliable information on the security of oil markets, and has provided a mechanism whereby oil-consuming countries can respond effectively to oil shortages,” the Republican leaders wrote in the letter.
In recent years, however, the IEA’s energy demand modeling “no longer provides policymakers with balanced assessments of energy and climate proposals,” said the lawmakers, adding that the Paris-based agency has turned into an “energy transition cheerleader.”
The GOP leaders also expressed concern that the IEA’s energy transition modeling is biased and ill-informs administrations relying on its forecasts.
In recent months, the IEA has forecast much lower global oil demand growth than OPEC and other forecasters, saying that rising energy efficiency and electric vehicle uptake would dent oil demand growth.
In its latest monthly assessment, the IEA raised last week its 2024 outlook on global oil demand growth, by 110,000 barrels per day (bpd) from the February report. The Paris-based agency revised up its demand growth projection to 1.3 million bpd for 2024, compared to 1.2 million bpd expected in last month’s report.
Despite the increased demand growth outlook, the IEA’s view on oil consumption growth continues to be much more conservative than OPEC’s.
OPEC expects global oil demand to expand by a “robust” 2.2 million bpd in 2024, and to see another 1.8 million bpd annual growth in 2025.
The IEA also predicted last year that demand for all three fossil fuels – oil, gas, and coal – would peak by the end of this decade.
By Tsvetana Paraskova for Oilprice.com
