OPEC said an IEA report suggesting that investors should not fund new oil projects to reduce emissions could lead to oil price volatility if implemented.
The International Energy Agency said on Tuesday that investors should not fund new oil, gas and coal supply projects if the world is to reach net zero emissions by mid-century, in its toughest warning yet to cut back on fossil fuels. Read more
The research division of the Organization of the Petroleum Exporting Countries, whose 13 members account for 80% of the world’s crude oil reserves, produced an internal briefing paper on the IEA report, a copy of which has been seen by Reuters.
“The claim that no new oil and gas investment is needed after 2021 stands in stark contrast to conclusions often expressed in other IEA reports and could be the source of potential instability in the oil markets if it does. is followed by some investors, ”says the OPEC report.
OPEC also said that a scenario in the IEA report could affect the way companies invest and limit demand for oil. The producer group currently predicts that demand for oil will pick up sharply this year and continue to increase until the 2030s.
“Although the NZE (net zero) scenario seems overly ambitious in terms of assumptions and outcomes, it will certainly influence investment decisions, which may dampen demand (growth) for fossil fuels such as oil and gas. , as many policymakers and oil and gas companies use the IEA scenarios for their strategic planning, ”OPEC said.
OPEC added that for many developing countries, the path to net zero emissions without international assistance was not clear and they would need technical and financial support to achieve this.
“Without greater international cooperation, global CO2 emissions will not drop to net zero by 2050,” OPEC said.
Our standards: Thomson Reuters Trust Principles.