The IEA Lashes Out At OPEC As A New Oil Price War Looms

Hamilton Nwosa
Writer

Ad

[FULL LIST] University of Ibadan Reclaims Crown as Nigeria’s Best Institution for 2026

By Abiola Olawale The University of Ibadan (UI) has surged back to the pinnacle of Nigerian higher education, clinching the title of the nation's top university in the Times Higher Education (THE) World University Rankings 2026. The development marks a return for UI, which dropped to fourth place in the previous year's assessment but now…

Experts React as FG, World Bank Clash Over Nigeria’s Poverty Figures

By Obinna Uballa A new poverty report by the World Bank has sparked a wave of controversy in Nigeria, with the Federal Government dismissing it as “unrealistic” and experts insisting that the figures, however grim, reflect the lived experiences of millions of citizens. The World Bank’s Nigeria Development Update released this week estimates that 139…

Israel, Hamas Greenlight First Phase of Trump’s Peace Plan

By Abiola Olawale Israel and Hamas have inked their approval on the inaugural phase of the United States President Donald Trump's Gaza peace initiative. The agreement, announced on Wednesday amid high-stakes indirect talks in Egypt, paves the way for an immediate ceasefire, the release of hostages, and a surge in humanitarian aid. This development is…

Ad

…The head of the International Energy Agency has criticized OPEC for failing to do enough with regard to lowering oil prices

…While Biden coordinated a reserve release from multiple oil-consuming nations, oil prices only climbed higher and OPEC threatened to react

…Some analysts are now warning of another oil price war, just as oil markets are months away from balancing

The head of the International Energy Agency, Fatih Birol, has lashed out at OPEC for failing to bring oil prices down. ″[A] factor I would like to underline that caused these high prices is the position some of the major oil and gas suppliers, and some of the countries did not take, in our view, a helpful position in this context,” Birol said, as quoted by CNBC this week.

“In fact, some of the key strains in today’s markets may be considered as artificial tightness … because in oil markets today we see close to 6 million barrels per day of spare production capacity lies with the key producers, OPEC+ countries,” Birol added.

On Tuesday, U.S. President Joe Biden announced that the Department of Energy would release 50 million barrels of oil from the Strategic Petroleum Reserve (SPR) in a bid to lower high gasoline prices in a coordinated effort with other major oil-consuming nations.

“[T]his release will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom,” the White House said on Tuesday.

The coordinated release was meant to cool oil prices, but instead, prices rallied after the U.S. said it would release crude from strategic reserves.

The IEA acknowledged the release of oil but made a point of noting that the agency had nothing to do with it, with Birol saying the IEA only resorts to reserve releases in emergencies. The official noted the move by the U.S. and its allies was related to the fact that surging oil prices had placed an additional burden on consumers at a time when inflation was also on the rise, and higher oil prices were only aggravating the situation.

So far, OPEC+ has not indicated that either inflation or anything else would interfere with its plans to stick to additions of 400,000 bpd to combined production every month until total output returns to pre-pandemic levels. Instead, there have been hints that the cartel might pause the additions in response to the reserve release.

“A new and unchartered type of price war is brewing in the oil market,” said Rystad Energy analyst Louise Dickson, as quoted by CNBC, questioning the timing of the release announcement as forecasts point to the oil market moving closer to balance in the first quarter of next year.

NB: Irina Slav wote this article for Oilprice.com

Ad

Unlocking Opportunities in the Gulf of Guinea during UNGA80
X whatsapp