Meetings of the International Energy Agency – March 2018

On 20-21 March 2018 two representatives of the Emergency Oil Stock Agency participated in meetings of the International Energy Agency (IEA) working groups in Paris - Standing Group on Oil Markets (SOM) and Standing Group on Emergency Questions (SEQ).

The subject of the SOM meeting was in particular the current situation on the global oil markets. Global oil demand will continue to increase, but the rate of annual increase will be gradually reducing over the coming years. In the year 2018 global oil demand is set to rise by about 1.4 million barrels per day (mb/d), while the IEA expects increase in global oil demand below 1 mb/d in the year 2023. Nearly half of that increase in demand will be covered by India and China. On the supply side in order to meet the increased demand the oil producers will have to invest in new production fields, as old production fields with a total capacity of 3 mb/d will be decommissioned each year in the near future. In the next few years increase in oil production will come mainly from countries not belonging to the OPEC organization, especially from the US, Brazil and Canada, but in the long term the increase in production should be covered predominantly by OPEC countries. Ultimately, the continued increase in oil demand and uncertain future of the production increase intensifies the importance of energy security and emergency preparedness of individual countries, including the Slovak Republic. Other topics of the meeting were the transformation of the oil and gas industry in the world, development of petroleum infrastructure in North America, situation of the oil sector in Russian Federation and IEA publication "World energy outlook 2017".

SEQ meeting was dedicated especially to the issues of emergency situations with regard to the supplies of crude oil, petroleum products, natural gas and electricity and preparedness of member countries for solution of the emergencies. IEA secretariat presented a proposal for revision of basic stockholding obligation of the IEA member countries which is currently based on net imports of crude oil and petroleum products. Some IEA countries are net exporters of crude oil what causes discord of their stockholding obligation with their oil consumption. Also the share of total levels of IEA countries emergency stocks is gradually reducing in comparison with the global oil demand, which is growing most quickly in countries not belonging to the IEA. Therefore the IEA secretariat is considering reform of member countries stockholding obligation, which should be based on domestic crude oil and petroleum products consumption instead of net imports. Talks between the IEA secretariat and member countries on what direction that reform should go will take place in following period. Emergency response review of Turkey and mid-term reviews of Denmark and Greece were also presented at the meeting. Also date of mid-term review of the Slovak Republic, which will take place in October 2018, was announced in the schedule of following reviews.