1 March 2011, Independent Online, South Africa
International Energy Agency (IEA) chief economist Fatih Birol warned that the recent unrest in the Middle East and Africa together with rising oil prices would take a toll on the Turkish economy. Birol told Today’s Zaman the recent spike in oil prices will negatively affect Turkey’s balance of payments. In what he summed up as 3+1 negative effects on the economy, Birol said rising oil prices will increase inflation, ultimately having a negative effect on growth as well. And finally, since the uprisings still have not been settled fully, Turkey’s trade to protest-ridden countries will take a hit, he added. On top of these three effects, rising oil prices will also drive up natural gas prices, which are determined by the former, Mr. Birol says. In Turkey, natural gas is widely used for electricity production, and it is a major production input for many sectors. Birol predicted that these (3+1) effects all together might slow down the Turkish economy in the near future, possibly leading to more interest rate cuts by the Central Bank of Turkey to deal with the negative effects of rising energy costs.
1 March 2011, Todays Zaman, Turkey
Saudi Arabia has increased oil production following a dramatic drop in Libyan exports, but some have worried that the uprising that has swept the Arab world could also affect the desert kingdom, greatly disrupting oil supplies. “Our estimates about Libya range between 800,000 to 1 million barrels a day being lost, but Saudi Arabia has been constructive and responsive, while our reserves at the IEA [International Energy Agency] are substantial,” Fatih Birol, the chief economist at the IEA, told the Hürriyet Daily News & Economic Review last week. “The IEA’s 1.6 billion barrels alone mean that 2 million barrels per day can be exported for two years without interruption in case of an emergency,” Birol said.
28 February 2011, Wall Street Journal
Industrialized countries would consider a coordinated release of oil from stocks to meet any supply disruption stemming from the political turmoil in the Middle East, the IEAs chief economist Birol told reporters on the sideline of a conference in Indonesia on Tuesday. "If they think there is a need to do so, they may well decide to release those stocks in order to cover the markets, if there is a physical disruption," he said, referring to IEA members 1.6 billion barrels of emergency oil stocks. Rising oil prices are already in the danger zone that threatens global economic growth and fuel demand and could rise further if turmoil continues in the Middle East, he added. Top oil exporter Saudi Arabia stood ready to pump more oil if necessary, Birol said. The kingdom is the only producer with significant spare capacity to meet any large global supply outage.
22 February 2011, Reuters
Australia, Indonesia and Papua New Guinea may help drive a new "golden age" of natural gas consumption from the supply side, while China will be the main driver on the consumption side, International Energy Agencys chief economist Fatih Birol said Tuesday in Jakarta. "I see a golden age for gas starting, and the start of this new age will be driven by Asia, both in terms of production and consumption," he said, speaking to reporters at the Pacific Energy Summit. "Around 2020, if current projects in Australia go ahead, we may see Australia become the number one gas exporter," Birol said. Meanwhile, in terms of consumption, China will be the primary driver. Last year, China consumed about 110 Bcm of gas, more than Japan, he said; and its consumption is expected to more than double to 250 million Bcm in the next five years, according to the targets set out in the latest five-year plan. "That is why China needs to import a lot of LNG from the Asia Pacific market," Birol added.
22 February 2011, Platts
The rising cost of oil would weaken the trade balances of industrialised countries, add to inflation and put pressure on central banks to adjust interest rates, IEAs chief economist Fatih Birol said today. If US oil prices touched $100 a barrel, the worlds third largest economy Japan would be spending 3 per cent of its GDP alone on oil imports, Mr Birol added. Referring to 1.6 billion barrels of emergency oil stocks held by IEA members, Mr. Birol said "if they think there is a need to do so, they may well decide to release those stocks in order to cover the markets, if there is a physical disruption". He said those stocks were sufficient to cover several supply disruptions. Top oil exporter Saudi Arabia stood ready to pump more oil if needed, Mr Birol said. The kingdom is the only producer with significant spare capacity to meet any large global supply outage. "Saudi Arabia is doing an excellent job in terms of showing their readiness to act if necessary," he said. "It is the right policy and I would like to see this policy continue."
22 February 2011, The Irish Times
The chief economist of the International Energy Agency recently did some crystal ball gazing in Toronto on what the future of energy might look like and his conclusions are worth a look. A few aspects of Fatih Birols presentation stand out, namely where the worlds oil supply is going to come from, the implications of the growing natural gas glut and the role of renewable energy in decreasing greenhouse gas emissions.
22 February 2011, Calgary Herald
The violence in Libya and continuing unrest across the Middle East have pushed oil prices into a "danger zone" that could threaten global economic recovery, the International Energy Agency has warned. Fatih Birol, the IEAs chief economist, said high prices could put pressure on central banks to raise interest rates, especially in more developed countries such as the UK. "Oil prices are a serious risk for the global economic recovery," he said. "The global economic recovery is very fragile – especially in OECD countries." He said oil prices had entered a "danger zone" for the recovery at over $90 a barrel.
22 February 2011, Guardian
As Libyas uprising keeps oil prices high, Europes bill for imported oil could be even bigger this year than it was in 2008 when crude jumped to $147 a barrel, potentially endangering the continents fragile economic recovery, the International Energy Agencys chief economist Fatih Birol said in an interview. If the price of European oil averages $100 a barrel this year, the European Union will have to spend $375 billion on oil imports—slightly more than the $369 billion it forked out in 2008 and much higher than the $221 billion paid in 2009 and the $299 billion spent last year, he said. As a percentage of GDP, the $375 billion would be more than double what the EU paid for imports on average between 1971 and 2008. Record-high crude prices in 2008 were widely considered a primary trigger for the global recession. "This is very risky, especially because Europe is the weakest link in the chain of the global economic recovery," Mr. Birol said. He also said he feared that if oil remained at or above $100 a barrel this year, it could stoke inflationary pressures in Asia, potentially putting a brake on economic growth in key Asian countries like China. Instability in the Middle East and North Africa could deter oil producers in the region from investing in new oil and gas projects, paving the way for additional supply challenges in the future. "What Im afraid of is that the current situation could lead to the postponement of investments, delays, which could drive up costs and in turn lead to a fall in production further down the road", Birol said.
22 February 2011, The Jakarta Globe
A key feature of the 12th Chinese five-year plan is its call to double the share of natural gas in Chinese energy consumption, to 8 percent in 2015 from 4 percent last year, according to Fatih Birol, chief economist of the International Energy Agency. This will make China a natural buyer of large quantities of Russian gas, making it a competitor to Europe, which already relies heavily on gas from Russia. The goals in China’s new five-year plan are consistent with the IEA’s “new policies” plan for climate change, a middle course that represents an improvement from current policies, Mr. Birol said. But he noted that the Chinese goals did not go far enough to meet what the agency considers necessary to prevent world temperatures from rising by more than 2 degrees Celsius, an increase that many scientists fear as potentially leading to very broad environmental changes.
19 February 2011, New York Times
High oil prices pose a danger for a global economic recovery and industrialised countries stand ready to release oil from stockpiles to meet Middle East supply disruptions, the IEAs chief economist said on Tuesday. High oil prices were detrimental to the interests of both consumers and producers as they could derail economic growth and curtail fuel demand, the International Energy Agencys Fatih Birol said. "Oil prices are a serious risk for the global economic recovery," Birol told reporters on the sidelines of an energy conference in Indonesia on Tuesday.