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.
“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)