Energy crisis could threaten global economic recovery

Photo by Peter Scherbatykh on Unsplash
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A global energy crunch is expected to boost oil demand by half a million barrels per day and could stoke inflation and slow the world’s recovery from the COVID-19 pandemic, the International Energy Agency (IEA) said on Thursday.

Oil and natural gas prices have soared to multi-year highs recently, sending power prices surging to record levels as widespread energy shortages hit Asia and Europe.

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“Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming,” the Paris-based agency said in its monthly oil report.

“Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery.”

As a result, global oil demand next year is now projected to recover to pre-pandemic levels, the Paris-based agency said.

Source: Reuters (Reporting by Noah Browning Editing by David Goodman)