The middle East will remain the key for the oil market in future decades, says Executive Director of the International energy Agency (IEA) Fatih Birol.
ANTALYA, 15 Nov. Investments in the oil industry in the world for the first time in 30 years will decline for two consecutive years: in 2015, the drop will be more than 20% and will continue next year, said Executive Director of the International energy Agency (IEA) Fatih Birol at a press conference in the framework of the summit of “big twenty”.
“This year we will see a reduction in oil investments by more than 20%. Next year we will see again a reduction in oil investments. We have never seen, over the past 30 years, reduction of oil investments for two consecutive years,” he said.
Lower prices will slow the transition to cleaner energy technologies, said Birol. In addition, long persistence of low prices could have other implications.
As noted by the representative of IEA, the middle East will remain the key for the oil market in future decades. If oil prices remain very low for many years, oil production in North America, Brazil, Africa and Russia can be reduced, and therefore the share of oil exports from the Middle East will increase.
Now approximately 55% of global oil exports accounted for by countries in the Middle East. If prices remain at 50 dollars, this figure will rise to 75% in global exports, the expert noted.
“This is very important, especially in the context of the current geopolitical situation in which we find ourselves. Some countries in the region such as Iraq, Syria, Libya, Yemen, pass through difficult times. So very low prices (of oil) for more than ten years can mean that geopolitics and oil will be more (interconnected) that may not be very good news for the stability and security of the oil markets,” he said.