IEA: if the oil prices will not grow, a number of countries will need to reform

IEA: if the oil prices will not grow, a number of countries will need to reform

While maintaining oil prices in the region of 30 dollars for barrel of GDP of countries in the Middle East could be reduced by 20%, which will require producing countries the appropriate response, said the Executive Director of the IEA.

MOSCOW, 20 Jan. Executive Director of the International energy Agency (IEA) Fatih Birol believes that the persistence of oil prices this year at around $ 30 per barrel could cause many producing countries to reform their oil sectors and the entire economy.

“If the oil price will remain at $ 30 per barrel (in 2016 — ed.), and if you look at the GDP of countries in the Middle East, it can be reduced by 20% is one fifth of GDP. This is very important. If prices remain at the same level, I suppose, many of the extractive countries will have to carry out reforms in the economy, in the energy sector and beyond,” said Birol in an interview with Bloomberg on the sidelines of the Davos forum.

Previously, Birol noted that while maintaining the price at $ 30 per barrel decline in GDP in 2016 may reach 10%.

Since the beginning of summer 2014 to the end of last year, oil prices have fallen more than tripled — from 115 to 36 dollars per barrel of Brent, and in 2016 already dropped below $ 30. Fundamentally the decline is due to the high level of production in a world with slower demand, including because of the situation in China.

However, such a deep drop (below $ 40-50) experts have been increasingly linked to financial factors, including the strengthening of the dollar. In forecasts they are generally single — low oil prices for a long time. As at 14.22 GMT, the March futures price for North sea petroleum mix of mark Brent fell 1.93% to 28,18 dollars per barrel.

“In 2016 we will continue to see pressure, leading to lower oil prices. But after 2016 we can pay a high price for a lower investment for two years in a row,” added Birol. From declining oil prices is currently suffering and the development of so-called “green” energy. “Many of the solutions offered by clean energy, vysokoshirotnoi. Against the background of low prices for oil, gas and coal is becoming more difficult to develop these expensive projects,” said Director of the IEA.