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IEA’s Fatih Birol explains why sharp rise in oil price disadvantageous

24 July 2018 13:33 (UTC+04:00)
IEA’s Fatih Birol explains why sharp rise in oil price disadvantageous

By Trend

Today, looking at the short term situation, one can see a very volatile and challenging period in oil markets, Executive Director of the International Energy Agency (IEA ) Dr Fatih Birol said in an interview with Trend.

He pointed out that geopolitical factors even more than pure fundamentals are important in determining oil price movements.

"For its part, the IEA is engaged in a close dialogue with major oil producers and consumers, both inside and outside the IEA Family, and we are monitoring market developments in order to be prepared to advise on any support that might be needed to ensure market stability. This is why the IEA was founded in 1974 and this role is as important today as it was then," said Birol.

Speaking about expectations for the oil prices, he said the IEA is not in the business of predicting oil prices – it is more concerned with ensuring that the market is well supplied.

" As such it is hard to know what circumstances could lead to an increase of that magnitude. That said, we can say with confidence that a sharp increase in the oil price is not in the interest of consumers around the world," noted Birol.

The IEA executive director said that indeed in the long run, high prices will mean that oil producers are more likely to lose out to alternative fuels as they capture increased market share.

The IEA works to ensure reliable, affordable and clean energy for its 30 member countries and beyond. Its mission is guided by four main areas of focus: energy security, economic development, environmental awareness and engagement worldwide.

IEA was established in November 1974. The original founding members were Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, Norway (under a special Agreement), Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States. Joining in the following years were Greece (1976), New Zealand (1977), Australia (1979), Portugal (1981), Finland (1992), France (1992), Hungary (1997), Czech Republic (2001), Republic of Korea (2002), Slovak Republic (2007), Poland (2008), Estonia (2014), and more recently Mexico (2018).

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