IEA warns high oil prices may cause global slowdown

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IEA warns high oil prices may cause global slowdown

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Sky-high oil prices are beginning to have an effect on demand according to the International Energy Agency.

But the energy policy adviser to the world’s most developed countries said prices could ultimately come down because of a global economic slowdown.

For the moment, prices at the pump remain painfully high for motorists.

The IEA said in the world’s top economies petrol prices rose 31 percent in the last year and diesel was up 40.2 percent.

In the euro zone, the average price for petrol is almost 1.54 euros a litre, in the UK 1.58 euros, in the US 69.4 euro cents, while in the world’s top crude producer – Saudi Arabia – it costs just 12 euro cents a litre.

Jean-Louis Schilansky, the head of UFIP, the French oil industry trade association said: “Even if, one day, it’s two euros a litre, which is quite likely, that needs to be a long way down the road. We need to invest to explore, research, and produce crude oil.”

The IEA said data for January and February suggested high oil prices may have started to dent demand.

But it kept its global oil demand growth forecast unchanged for this year though noted a slowdown in the United States and the Asian Pacific region – particularly China, Thailand and Malaysia.