Reuters reports that the International Energy Agency (IEA) said that a global energy crunch is expected to boost oil demand by half a million barrels per day and could stoke inflation and slow the world's recovery from the COVID-19 pandemic.
"Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming," the IEA said in its monthly oil report.
"Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery."
IEA made upward revisions to its demand forecasts for this year and 2022, increasing them by 170,000 bpd and 210,000 bpd respectively.
Meanwhile, the IEA estimated that producer group OPEC+ is set to pump 700,000 bpd below the estimated demand for its crude in the fourth quarter of this year, meaning demand will outpace supply at least until the end of 2021.