IEA Warns of Energy Security Risks with Disinvestment in Oil and Gas
The world's energy landscape is more complex than previously thought, according to recent analysis from the International Energy Agency (IEA). The agency initially recommended an end to new oil and gas projects in its 2021 net-zero roadmap, warning that additional investment could create stranded assets. However, the IEA has since acknowledged a need for continued investment to maintain energy supplies.
The IEA estimates that global oil production would decline by about 5.5 million barrels per day, roughly the combined output of Brazil and Norway, if new investment stopped altogether. To maintain current production levels through 2050, more than 45 million additional barrels per day from new conventional oil fields would be required.
The consequences of underinvestment in energy become clear during times of conflict or disruption, such as the war with Iran or Ukraine's attacks on Russian infrastructure. These events can quickly turn energy assumptions into economic risks, causing oil prices to spike and reviving concerns about an energy crisis.