IEA director reveals biggest challenge facing oil market

The director of the International Energy Agency, Fatih Birol, said the biggest uncertainty facing global energy markets is the extent of China’s recovery from its extended lockdown.

Fatih Birol told CNBC that the strength of this feature will determine the dynamics of the oil and gas market.

He pointed out that the oil markets are “balanced” at the present time, but producers are waiting for signs about the expected demand from the second largest economy in the world and the largest importer of crude oil.

Birol believes that the biggest signal for the oil market will come from China during the coming months, pointing to a significant decrease in the demand for oil and gas in China during the epidemic closures.

Birol noted that China’s economy is currently recovering. “The strength of this feature will determine the dynamics of the oil and gas market.” “If this is a very strong recovery, there may be a need for oil producers to increase their production,” he added. The head of the International Energy Agency indicated that the “OPEC Plus” countries, in addition to other oil-producing countries such as the United States, Brazil and Guyana, are preparing to increase production to meet this demand, if necessary.