The Executive Director of the International Energy Agency, Fatih Birol, said yesterday that energy markets may witness a greater shortage of supplies in 2023, and he expressed his hope that prices will not rise further until the pressure on developing countries importing energy decreases.
“I will not be very comfortable about the markets, and maybe 2023 will be a year in which we will witness a greater shortage of markets than some colleagues might think,” Birol said on the sidelines of the Davos forum.
Brent crude futures fell 84 cents, or 1 percent, to $84.14 a barrel, and UAE Energy Minister Suhail Al Mazrouei and Saudi Aramco Chairman Amin Nasser said this week that they saw oil markets as balanced.
Birol told Reuters on the sidelines of the annual meeting of the World Economic Forum in Davos that although there is no shortage in the market now, there are issues of uncertainty that must be monitored, namely Chinese demand and Russian supplies.
“If the Chinese economy recovers this year, which many financial institutions expect, we may see very strong demand, which will put pressure on the markets,” he added.
Regarding Russia, Birol said there are many question marks over its ability to export due to Western sanctions, as well as others in the long term due to its own challenges.
He explained that the international companies that helped develop Russian oil fields and put them into production have all left.
“Looking at the slightly longer term, I think the Russian oil industry will face huge challenges,” he said.
At the beginning of the Ukraine crisis, the IEA overestimated the impact of Western sanctions on Russian oil exports by a large margin, and said that oil markets could lose up to three million barrels per day.
Birol said that Russian oil exports appeared to be more “resilient” than expected at the beginning of last year.
He added, “Russian oil exports are declining now, as we expected, and they will decline further in the first quarter of this year and beyond,” noting at the same time that Asian countries, especially India and China, will continue to buy Russian crude and products.
