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Page added on February 19, 2013
IEA: Oil Prices a Major Threat to Europe’s Economy
Oil prices are acting as a brake on the global economy, and harming Europe in particular, the International Energy Agency’s chief economist said at a conference in London today.
Europe will need to spend 500 billion euros ($668 billion) on oil imports this year, about 200 billion euros more than average levels, if oil prices remain near current levels, the IEA’s Fatih Birol, said in London at the start of International Petroleum Week.
“Prices are very high,” he said in a Bloomberg Television interview. The “current level of oil prices is a major impact on the global economy, but especially for Europe.”
Asked by reporters if IEA members are considering a release of emergency stockpiles, Birol said the agency doesn’t “discuss stocks just when prices are rising. We do it when there is a supply disruption.”
The IEA’s annual World Energy Outlook report, due later this year, will focus on U.S. oil supply, Birol said.
IEA is a policy adviser to 28 industrialized nations, most of whom are net oil importers.
More than 80 percent of oil projects worldwide have been delayed by about three years because of technical challenges and security issues, Birol added. “We will see more and more delays in delivering production.”
Brent crude oil futures traded near $118 a barrel today on the ICE Futures Europe exchange in London.
10 Comments on "IEA: Oil Prices a Major Threat to Europe’s Economy"
Plantagenet on Tue, 19th Feb 2013 3:33 am
The EU has the highest energy taxes in the world—the taxes are so high that a gallon of gas there typically costs $8-10 bucks a gallon.
And now the moronic EU economists are worrying that high energy prices are hurting their economy??
SHEEESH! If you want lower energy prices then cut your taxes, you dopes!
Simple on Tue, 19th Feb 2013 4:33 am
Plantagenet, 500 billion euros is what the EU will pay to import the oil. Not what it’ll cost when they come to sell it to their citizens with fat taxes on top. Lower the taxes and they’ll be in even more trouble!
I still agree though that EU economists are moronic, infact, most economists are regardless of where they’re from.
sparky on Tue, 19th Feb 2013 9:38 am
.
Plantagenet the price of gas for private driving is a minor detail .
I know in the U.S. it’s akin to religion
but believe it or not , oil is used for way more important things ,industry , farming and trucking
European motorcars are very fuel efficient
Europe got outstanding public transport
The high taxes are acting as a brake on consumption
High price of crude are now an absolute limiting factor on growth .
when there is a bit of growth , crude price rise
throttling growth
when growth peter out , price trend down a bit
That’s a symptom of Peak Oil ,
supply and demand are bouncing off each other
BillT on Tue, 19th Feb 2013 10:46 am
Wait until they hit $150 later this year…lol.
Arthur on Tue, 19th Feb 2013 11:45 am
I would not mind $150 dollar oil as it will make it clear for everyone that the oil age is over and that it is time for something new:
http://cleantechnica.com/2013/02/19/solar-power-cheaper-than-nuclear-in-cloudy-old-england/
As sparky says, cars in Europe are much smaller, more fuel efficient and most important, the distances that need to be bridged are a lot shorter (USA 15k miles, Holland 12k km, almost a factor of 2, so there you go). In end effect is does not matter much, the ‘difference’ in effect of the oil price at the pump on ‘the economy’ between Europe and North-America.
Beery on Tue, 19th Feb 2013 12:07 pm
Plantagenet’s answer to every problem is to cut taxes. The reason Europe will be in a better state than the US when the situation really gets bad is because they have used gasoline taxes to help them pursue other energy options. We haven’t.
Econ101 on Tue, 19th Feb 2013 1:46 pm
Economuc problems in Europe start and end with irresponsible government spending particularly on social support mechanisms. Oil is a boogeyman used to hide the truth of high taxes, deficit spending and restrictive energy development policies.
Kenz300 on Tue, 19th Feb 2013 6:11 pm
Diversify……
It is time to end the oil monopoly on transportation fuels.
The oil companies love it when oil prices spike. They make huge windfall profits.
You can walk, ride a bicycle or take mass transit.
If you need to travel longer distances buy a fuel efficient vehicle that runs on an alternative energy source.
Electric, biofuel, flex-fuel, hybrid, CNG and LNG vehicles are available and growing in popularity as oil prices rise as people and businesses seek ways to reduce their transportation fuel costs.
The era of cheap oil is over. The only question now is how your going to deal with it.
Arthur on Tue, 19th Feb 2013 10:00 pm
http://www.bloomberg.com/news/2013-02-19/euro-breakup-risk-falls-to-5-year-low-in-butterfly-currencies.html
Unlike the gloomy IEA, Bloomberg sees the euro moving out of the danger zone of breakup (if that danger existed at all).
“The bonds of Greece, Portugal, Ireland, Spain and Italy — the region’s most indebted-economies– have been the best performers among sovereign debt in that period (last six months)”
BillT on Wed, 20th Feb 2013 1:41 am
Arthur, I prefer other ‘news’ sources than the MSM Bloomberg. If you listen to the ‘news’ in the US, we are booming and everything is fine. Tell that to the 47+ million that need government assistance for food or the crumbling streets and rise in crime, or the $1,000,000,000,000.00+ that we are printing to keep the game from ending here, or the trillions loaned to European banks to keep the game going there. No, Europe is in the game so deep than when the first domino falls, it will take out the whole Western world and anyone tied too tight to the dollar.