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IEA: The Current Energy Crisis Is Unprecedented

IEA: The Current Energy Crisis Is Unprecedented

  • The executive director of the International Energy Agency has said that the world is currently in the middle of the first truly global energy crisis.
  • Natural gas markets are particularly tight, and they are set to worsen next year as demand climbs and Europe struggles to replace Russian pipeline gas.
  • As well as being more expensive than pipeline gas, the lack of infrastructure to import LNG to Europe is resulting in delivery delays.

“The world is in the middle of the first truly global energy crisis,” the executive director of the International Energy Agency, Fatih Birol, said today in Singapore.

The official went on to warn that natural gas and LNG markets would tighten further in 2023, with only 20 million tons of new liquefaction capacity scheduled to come online in that year, Reuters reported.

Speaking at the Singapore International Energy Week, the head of the IEA also said that while supply remains tight, demand for gas will continue to be strong, especially in Europe and possibly in China.

Birol’s warning comes amid expectations that this winter will not be the toughest for Europe. Next winter is believed to be potentially much worse because, during the first half of this year, the EU could stock up on Russian pipeline gas, which is unlikely to come back next year, leaving the EU with a supply gap that other suppliers would be hard-pressed to fill.

Meanwhile, as many as 60 LNG tankers have turned into floating storage off European coasts as there is not enough regasification capacity on the continent to unload the cargo.

This, CNBC reports, is delaying some of the tankers’ return to the Gulf Coast to reload, and pushes gas inventories higher, Andrew Lipow from Lipow Oil Associates told the network.

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