OPEC Warned By EIA Chief: Escalating Oil Prices Fuels Faster EV Adoption And Clean Energy Revolution

Zinger Key Points
  • According to the EIA, one out of every five new cars sold in 2023 will be electric.
  • OPEC trying to disrupt oil prices represent a drag for the global economy, particularly on emerging markets.

Fatih Barol, executive director of the International Energy Association (IEA), is cautioning OPEC countries that efforts to raise oil prices could have a detrimental effect on global growth and risks accelerating the transition to renewable energy.

"They have to be very careful," Barol said in an interview with Bloomberg television on Wednesday. “The global economy is in a very fragile stage,” he said. “To see higher oil prices and upward pressure on inflation, that is the last thing that we want.”

In his latest tweet, the IEA chief stated that electric cars are booming, and he expected global sales to jump 35% this year to 14 million. He also emphasized how the electric-vehicle market penetration has increased from 2.5% in 2019 to 18% in 2023.

Higher Oil Prices Are Detrimental For Global Economy

Birol affirmed that OPEC's action was harmful to the global economy and emerging countries in particular. 

On April 2, the cartel of oil-producing nations known as OPEC+ announced a 1.66 million-barrel-per-day cut in crude production starting in May. 

The organization stated that the agreed-upon supply cuts were necessary to protect oil markets from aggressive and unjustified short-selling by speculators. 

Also Read: First Republic Bank Shares Sink Another 20% With Report Of Government Unwilling To Come To The Rescue

Chart: Crude Prices Retrace To Pre-Opec Cut

Crude oil prices have recently fallen, pushed down by rising concerns about declining demand.  

WTI traded around the $75.50-$76.00 region on Wednesday, returning to levels last seen before OPEC+ opted to limit output at the beginning of the month. During Wednesday morning trading, the United States Oil Fund ETF USO was down 1.5%.

Read now: Awaiting Q1 GDP Results: Can US Economy Fend Off Recession Fears?

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