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The oil industry’s most important bodies, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC), seem to be in an adversarial relationship, disagreeing about where oil demand and the energy transition are headed.
OPEC has been edging toward an acceptance that oil demand will not lower at the end of the decade than it is right now.
The OPEC said on Thursday that data-based forecasts do not support the IEA’s projection that demand for fossil fuels would peak in 2030. OPEC said this forecast is not “fact-based” and could threaten energy security by discouraging investments in oil and gas projects.
IEA executive director Fatih Birol said in an op-ed in the Financial Times on Tuesday that demand for three fossil fuels — oil, gas, and coal — will peak by the end of this decade. Birol wrote that the agency’s estimates are based on “today’s policy settings by governments worldwide,” including the expansion of renewable energy and increasing use of electric vehicles.
However, in a strongly-worded statement, OPEC said that “consistent and data-based forecasts” do not support the IEA’s prediction, accusing the agency of “being ideologically driven, rather than fact-based.”
“It is an extremely risky and impractical narrative to dismiss fossil fuels, or to suggest that they are at the beginning of their end … what makes such predictions so dangerous is that they are often accompanied by calls to stop investing in new oil and gas projects,” OPEC said.
“Such narratives only set the global energy system up to fail spectacularly. It would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world,” OPEC Secretary General Haitham Al Ghais said in the statement.
According to OPEC, the IEA prediction also has not considered “the technological progress the (fossil fuel) industry continues to make on solutions to help reduce emissions.” Neither has it acknowledged the vital role of fossil fuels, which “continue to make up over 80% of the global energy mix, the same as 30 years ago.”
The oil-producer group said it would cooperate with all relevant stakeholders to foster dialogue to contribute to global energy stability.
The IEA and the US, Britain, and other oil-consuming nations have previously criticized production cuts by OPEC and its allies, a group known as OPEC+. The IEA has accused OPEC+ of exacerbating the energy crisis and driving inflation. OPEC has insisted that the output cuts were made to stabilize the oil market.
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