IEA: Low oil prices hurting investment and energy efficiency

The world has seen a reduction in investment and energy efficiency measures due to the prolonged period of lower oil prices. New analysis from the International Energy Agency (IEA) reveals […]

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By Priyanka Shrestha

The world has seen a reduction in investment and energy efficiency measures due to the prolonged period of lower oil prices.

New analysis from the International Energy Agency (IEA) reveals the current oil price environment has also boosted the share of oil produced in the Middle East.

It found investments in the oil sector declined last year and in 2016, the first consecutive two-year drop in three decades.

The industry cut more than $300 billion (£271bn) in spending in two years or 42% of the total, with North America having accounted for around half the drop, it adds.

The report also point out oil supply in the Middle East has reached “historically high levels”, exceeding 31 million barrels per day.

The region now accounts for 35% of global oil supplies, the highest level since 1975.

The IEA also reveals lower oil and fuel prices are hurting energy efficiency trends in some nations, particularly the transportation sector “where they have given a boost to the sale of sport utility vehicles”.

It states: “Consumers have moved away from energy efficient vehicles that they favoured when oil prices were higher. In the United States, SUV sales are now 2.5 times higher than light duty vehicles. In China, SUV sales are four times higher than light duty vehicle sales.”