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Page added on February 27, 2009

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IEA says oil capacity crunch looms

The International Energy Agency fears that an expected recovery in oil demand from 2010 and oil project cancellations due to low crude prices and the credit crisis will mean no spare oil capacity at the end of 2013.

“That is our concern. Investment, investment, investment, that is what we are asking,” IEA Executive Director Nabuo Tanaka said at a conference in Lisbon on Friday.

The Paris-based IEA, which advises 28 industrialised countries, earlier this month said global oil demand would drop by 980,000 barrels per day this year but would rise again by about 1 million bpd in 2010 with an expected economic recovery.

Tanaka said in a Reuters report that there was no room for complacency on spare oil capacity.

“We now see many cancellations or postponements of supply investment projects…and we learned the lesson last year when we didn’t invest, the market became volatile and oil prices reached $147 per barrel,” he said.

Upstream Online

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