IEA: shock in the oil market will affect global supply chains

US, WASHINGTON (ORDO NEWS) — The crisis caused by the coronavirus pandemic will be felt in all global oil supply chains and spread to other parts of the energy sector, the International Energy Agency (IEA) said.

About 5 million barrels of oil produced in the world every day do not attract high enough premiums to offset production costs, the agency said.

Under these conditions, oil producers reduce production costs. The initial decline was 20-35% compared to expenses previously planned for the current year.

Many large oil companies will review their existing portfolios, which may lead to a new wave of closure of refineries, the IEA warned.

The collapse in oil prices may affect other sectors of the energy sector. A steady period of low oil prices will affect the prospects for a transition to clean energy, such as natural gas, the agency said.

The head of the IEA Fatih Birol previously warned that global oil demand could fall by 20% against the backdrop of the COVID-19 pandemic.

Online:

Our Standards, Terms of Use: Standard Terms And Conditions.

Contact us: contact@ordonews.com

The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.