The ongoing energy crisis could boost oil prices in a way that hampers the global economic recovery, according to the International Energy Agency.
The IEA in its latest report predicts that the surge in prices through the global energy chain is fueling inflationary pressures, causing blackouts and could hurt growth.
“Record coal and gas prices as well as rolling black-outs are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming.
“The higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery,” it said.
The IEA adds that shortage of natural gas, LNG and coal have all boosted demand for oil, driving US crude to a seven-year high and Brent to a three-year peak.
This switch to oil could boost demand by 500 kb/d compared with normal conditions, the IEA predicts.