IEA chief warns of return to Russian gas despite global LNG boom

Fatih Birol, the Executive Director of International Energy Agency (IEA), said that looking to Russia for gas supplies would be economically and politically wrong. This is because LNG will soon become a global source.

Birol said to?reporters that the current Middle East crisis has led some to question whether or not to return to Russia. This was after a meeting between European Commission President Ursula von der Leyen and EU commissioners regarding global energy markets. The EU faces increasing pressure from governments and industries to intervene to reduce high energy prices. Von der Leyen has promised to prepare options for EU leaders to consider at the summit later this month.

The IEA's chief stated that Europe made a historical mistake by over-relying on Russia as its sole energy source. Two EU officials said that the Commission is considering reducing taxes and tariffs which are responsible for the high energy costs in many countries, or allowing governments to use more state assistance to support energy-intensive industry. Analysts and officials agree that there is no easy solution, but the EU governments are divided. Europe is heavily dependent on imported gas and oil, making it highly vulnerable to global price fluctuations. Prices have risen this week following the escalation in the Iran crisis. Birol stated that there were a number of options on the table, but at this time no plans have been made for a collective action by countries to address oil supply issues. Reporting by Kate Abnett and Gianluca Nostro; Editing and production by Alexandra Hudson, Tomaszjanowski and Tomasz Hudson

(source: Reuters)