Sanctions against Russia could trigger 'Global Energy Crisis': IEA Chief

Paris: – Fatih Birol, the Chief of the International Energy Agency (IEA), issued a serious warning that taking into account the lead position of Russia in the international energy sector, sanctions imposed against this country could trigger a global energy crisis. Many leading countries, including the European countries, are dependent on Russian fuels. The oil-producing nations have unanimously refused to increase oil production. IEA has pointed out that in this scenario, the efforts of the United States and allies to target the Russian fuel exports will create a new crisis for the countries importing oil from Russia.

The demand for oil and energy suddenly increased greatly when the economies were wriggling out of the Coronavirus crisis last year. But many leading countries were faced with an energy crisis given limited production and disruptions in the global supply chain. These included the United States, China and even India. China increased oil imports and India increased production to tide over the crisis. The United States opened its strategic reserves and projected a picture that the fuel crisis had been tackled to an extent. But the fuel and energy crisis in the European countries has not been entirely resolved and the Russia-Ukraine war has added to the woes of Europe.

Natural Gas is the major fuel used in electricity production in Europe. More than 30% of this fuel gas is imported from Russia. The global oil requirement stands at 100 million barrels per day. Russia exports 10% out of this, which is one million barrels of oil. The global requirement of natural fuel gas is 4 trillion cubic metres and out of this, Russia supplies 640 cubic metres of natural fuel gas. More than 15% of the global coal requirement is supplied from Russia.

This background underlines the leading Russian position in the fuel sector. Therefore, the warning issued by the IEA Chief becomes important. While warning regarding the energy crisis, Birol also pointed out that decisive steps need to be initiated for energy and fuel security on the international level. Many of the economies in the world are still reeling under the energy crisis faced in the last year. If there is an addition of a new crisis, it could have significant repercussions on the global economy. International analysts have warned that inflation could increase given the sanctions against Russia, triggering a global economic recession. The IEA’s warning only endorses this view.