BAKU, Azerbaijan, September 3. G20 countries need to consider improving their oil stocks, as well as gas storage, in order to take account of changing supply and demand course, and secure energy stability, Trend reports via the latest publication from the International Energy Agency (IEA).
“Oil stockholding during energy transitions remains critically important to ensure a stable supply of oil, and is an invaluable tool to maintain oil security in case of oil supply disruption”. The IEA’s oil stockholding requirement obligates its member countries to secure oil stocks of at least 90 days of net imports and suggests to take collective action in case of oil supply disruption.
“An evaluation of the current mechanism is vital to make sure that countries continue to be ready to respond to disruption during their energy transitions and with a greater concentration of oil consumption in emerging economies,” the report said.
According to the IEA, given the increasing importance of gas as a fuel for the transition in many countries, gas storage may be a useful means of improving the security of gas supply to address unexpected supply disruptions, and each country should consider adopting or strengthening measures and policies related to gas storage.
Also, planning and developing the necessary infrastructure for the oil imports and storage, LNG imports, as well as for gas distribution and storage, are necessary to ensure a stable supply, especially in energy-importing countries, where oil and gas demand continues to rise during energy transition.
“Maintaining sustainable supplies and meeting growing demand during energy transitions require adequate levels of investment in infrastructure, and planning should be supported by medium- and long-term national strategies to avoid new infrastructure becoming stranded assets in the future,” the report explained.
Although, as the IEA noted, oil and gas consumption will remain essential during energy transition, especially for the developing Asia, mostly driven by OPEC+ supplies.
“As global oil demand declines, the IEA expects OPEC to increase its market share of global oil production to 52 percent by 2050, compared with 37 percent in recent years. This concentration of production could potentially limit oil importing countries’ efforts to diversify supply, which in turn could have a negative impact on energy security,” the report added.
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