Halting investments in fossil fuels 'wrongheaded': Opec

OPEC's latest World Oil Outlook warns that failure to keep investing in fossil fuels could risk geopolitical instability, Al Jazeera reported.

Halting new investments in fossil fuels is "wrongheaded" despite global commitments to transition to greener energy, the head of the Organisation of the Petroleum Exporting Countries (OPEC) said as he warned that oil demand will continue to accelerate in the coming years as economies bounce back from the Covid-19 pandemic.

OPEC sees oil demand returning to pre-pandemic levels next year and continuing to surge by 1.7 million barrels per day (bpd) in 2023.

Presenting the cartel's annual World Oil Outlook at OPEC headquarters in Vienna, Secretary General Mohammad Barkindo warned that funds are critical to keeping up with surging demand.

"If the necessary investments are not met, it could have not only implications as viewed in current gas developments in Europe and elsewhere around the world, (but) leave long-term scars, not only for producers, but consumers as well," Barkindo said, the report added.

After the huge 9.3 million bpd drop in global oil demand last year when the coronavirus pandemic crushed global business activity, oil markets are regaining their mojo as economies recover.

Brent crude, the global benchmark, surged past $80 a barrel on Tuesday -- its highest level in three years.

But those sharp increases in energy prices are rippling through the global economy, leading to higher costs for producers that are often then passed on to consumers, the report said.