NEW YORK (Oil Price) - The global energy crunch might worsen further, the head of the International Energy Agency Fatih Birol has warned, noting that winter in Europe will be “difficult”.
“The world has never witnessed such a major energy crisis in terms of its depth and its complexity,” Birol said at an industry event in Australia, as quoted by Bloomberg. “We might not have seen the worst of it yet -- this is affecting the entire world.”
The top man of the IEA noted the whole global energy system was in turmoil following Russia-Ukraine war, with prices of energy commodities skyrocketing across the board because of Russia’s size as an oil and gas exporter.
The situation is particularly bad in Europe, where, Birol said, “This winter [...] will be very, very difficult. This is a major concern, and this may have serious implications for the global economy.”
Indeed, Europe is already worrying about the winter after Russia reduced the flow of gas via the Nord Stream 1 pipeline in June, blaming a delay in receiving a turbine from Canada, which had just imposed fresh sanctions on Moscow.
Earlier this week, Canada agreed to return the turbine after Germany asked it to make an exception, but Gazprom stopped the gas flow via Nord Stream 1 completely for regularly scheduled maintenance, sparking fears that it might not restart the flow after maintenance is completed.
Europe has been snapping up LNG cargos from all over the world to fill its gas storage ahead of the next heating season—and to fuel its economies as it seeks to reduce imports of Russian gas—but it has still a way to go before it reaches the goal of 80 percent by end-October.
Birol compared the current situation to the oil crisis of the 1970s, noting how that crisis spurred major progress in fuel efficiency and saying this one could lend additional momentum to the transition to low-carbon energy.