Petroleum politics

Fears of another possible energy nightmare, which will again test fragile economies, are looming across Europe after the escalation of hostilities in the Middle East.

When Israel’s war against Hamas began a year ago, concern about the economic impact it could have on the wider global economy focused on the price of oil.

The world is likely to have a "major surplus" of oil by 2030 as production is ramped up while the clean energy transition tempers demand, the International Energy Agency said in an annual report published Wednesday.

Government and farmers in open line - Continuous symbolic road blockades

The war between Israel and Hamas could trigger price shocks for raw materials such as oil and agriculture products if the conflict escalates across the Middle East, the World Bank warned in a report yesterday.

Oil has already risen six percent since the latest round of fighting, sparked when Hamas militants from Gaza stormed southern Israel.

European Union officials discussed diversifying oil stocks and creating a buffer for diesel and gasoil during an emergency meeting of the bloc's oil coordination group, one told Reuters.

Friday's meeting was called by the EU commissioner for energy Kadri Simson to assess potential supply risks in case the Israel-Hamas conflict triggers a broader regional one.

Russian government oil revenues plunged nearly 50 percent in the first five months this year, U.S. Deputy Treasury Secretary Wally Adeyemo has said, six months since a price ceiling was enacted.

Riyadh on June 4 announced a fresh oil output cut following a meeting of major producers aiming to prop up prices despite fears of a recession.

The meeting of the 13-member Organization of the Petroleum Exporting Countries (OPEC) headed by Saudi Arabia and its 10 partners, led by Russia, saw some tough negotiations.

The group of oil-producing countries agreed on Sunday to extend oil production curbs through 2024 as petrol prices remained stable, according to "The Hill".

Investment in solar power is expected to overtake oil for the first time this year as clean energy spending outpaces that for fossil fuels, the International Energy Agency (IEA) said in a report yesterday. 

While that is a welcome development, warned the IEA that investment in fossil fuels is rising when it should be falling fast to achieve net zero emissions by 2050.