VIENNA-ALSHARQIYA July 13: Stalled talks among major oil producers about pumping more supplies could lead to a price war, the International Energy Agency said on Tuesday, while vaccines to prevent Covid-19 contribute to higher demand for crude.
The Paris-based agency said the possibility of a battle for market share - even if remote - threatens markets, as well as the possibility of higher fuel prices threatening to fuel inflation and damage a fragile economic recovery.
And she added in her monthly report on the oil market that the stalemate in “OPEC Plus” (OPEC +) means that production quotas will remain at July levels until a settlement is possible, in which case the oil markets will witness a state of scarcity at a time when demand recovers from The drop driven by COVID-19 last year.
A dispute between Saudi Arabia and the UAE in OPEC Plus - a group that includes producers from the Organization of the Petroleum Exporting Countries (OPEC), Russia and others - halted talks last week on boosting production after several days of negotiations.
But the Energy Agency said that the rise in HIV infections in some countries remains a major risk.
She added that the levels of oil stocks in most developed countries fell below historical averages, and that the withdrawal from crude stocks this fall is expected to be the largest in at least 10 years.
The agency said that oil markets will likely remain volatile until the OPEC Plus production policy becomes clear, and volatility is not helpful in ensuring an orderly and safe energy transition, and is not in the interest of producers or consumers.