An "Earthquake" At The IEA
LONDON: The rapidly growing appetite for fossil fuels in China and India is likely to help keep oil prices high for the foreseeable future - threatening a global economic slowdown, a top energy expert said Wednesday.
The unusually stark warning by Fatih Birol, chief economist of the International Energy Agency, about the impact of Asia's emerging giants comes as the agency prepares to issue its influential annual report next week, which will focus on China and India.
In preparing the report, Birol said he had experienced "an earthquake" in his thinking.
"China plus India are going to dominate growth in the oil markets," Birol said during an interview at an oil industry conference. During the past 18 months, he noted, more than two-thirds of the growth in global oil demand came from China and India alone.
Demand for oil in China, he added, would eventually equal the entire supply from Saudi Arabia.
Partly as a result, he added, the annual report would predict that oil prices, now at about $93 a barrel, could remain at levels much higher than thought possible in the past. This, he said, heightened the risk of a serious global economic slowdown.
"We may see very high prices that will come to a level where the wheels may fall off," Birol said. "I definitely believe that if prices stay at these levels, there will be a slowdown of the global economy."