The Islamabad Chamber of Commerce and Industry (ICCI) on Sunday said that low oil prices were pushing the world into a new crisis of energy insecurity which must be tackled. The world was increasingly relying on cheap oil and gas from the Middle East which was putting strain on reserves while leaving energy industries in the west bankrupt, said ICCI President Atif Ikram Sheikh.
Banks were starting to pull back from lending to energy companies due to increasing defaults as global investments in the oil and gas sector had plunged by 20 percent and there was no chance of increased investments in the next year which was worrying, he commented.
The ICCI president said that majority of the oil producing countries had seen wide budget deficits which had slowed growth and reduced demand that had also hit exports of many countries including Pakistan.
Middle East was bracing to regain lost ground to cover 66 percent of the global demand after 1970 but lack of investment could result in a global crisis with Asia worst hit, he warned. According to projections, China would be consuming five times fuel that the US consumes by 2040 while half of the electricity in EU would be produced by renewables, he informed.
Sheikh said by 2040 China and Japan would be producing 30 percent electricity through renewables while the ration in the US and India will stand at 25 percent which will reduce oil demand.
Experts see less than one percent surge in global oil demand until 2020 while OPEC’s intention to dominate oil market can keep prices under $50 per barrel due to its low cost of doing business. Pakistan needs to be cautious and take timely actions, he warned.
