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The Technical Committee of the OPEC+ group has dropped the International Energy Agency as a secondary source of member oil production data in favor of Norwegian consultancy Rystad and Wood Mackenzie.
This is according to a report by Reuters that spoke to an OPEC+ insider familiar with the group’s actions. The decision to switch from the IEA to Rystad and Wood Mackenzie was made after a thorough analysis, the source said.
Production data from secondary sources is essential for OPEC before and OPEC+ now to make sure all member countries of the production control agreement sealed at the start of the pandemic comply with requirements or at least don’t stray from them too much.
In addition to secondary sources, OPEC also reports primary source production data every month, with figures from member countries themselves.
The Reuters source did not detail the reason for the switch, but the report noted that some members of OPEC+ had expressed criticism of IEA data recently.
It’s not only data that bothers the oil producer group when it comes to the International Energy Agency, it seems. Based on recent media reports, some in OPEC+ are unhappy with the IEA’s attitude to oil supply control, with the energy minister of the UAE recently directly slamming the organization for pushing for more oil.
His Saudi counterpart, Abdulaziz bin Salman, last year went further, calling the IEA’s Roadmap to Net Zero “La La Land”, which eventually proved not incorrect since the IEA asked OPEC+ for more oil investment just months after saying that all new investments in oil and gas should end in 2021.
Bloomberg noted that the exchange of critical remarks between the two organizations has been going on for months now, suggesting the removal of the IEA as a secondary source of production data is the next step in the dance.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
I have always maintained that the IEA research is shallow, biased and politically-motivated with its sole purpose is to depress oil prices and oil demand by providing distorted information and sometime outright false data.
Here is the proof.
(1) in 2018 the IEA projected that US crude oil production will be bigger than the combined production of both Saudi Arabia and Russia by 2025. How ludicrous one could be?
(2) In 2021 the Head of the IEA Fatih Birol called for an immediate halt in investments in oil and gas to achieve what he described as net-zero emissions by 2050 roadmap then a few weeks later he reversed course calling on OPEC+ to lift its oil production beyond its agreed volumes in support of calls by President Biden.
(3) The Head of the IEA has become a cheer leader of US shale oil production exaggerating its potential to the extent that former Saudi Energy Minister Khaled al-Falih felt obliged at the Davos Economic Forum in 2018 to accuse the IEA Head’s exaggeration as pure hype.
(4) Long before the Ukraine conflict came on the scene, Fatih Birol accused Russia of causing the energy crisis that has enveloped the EU in the second half of 2021 when it was obvious that the crisis was caused by the hasty policies of the EU to accelerate energy transition at the expense of fossil fuels.
And while the choice of Wood Mac data as a secondary source is a good one, the choice of Rystad Energy isn’t an inspired one. The Norwegian Consultancy outfit is another cheerleader of the potential of shale oil hyping like the IEA about its potential and also producing data aimed at depressing both global oil demand and oil prices like the IEA.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London