Important steps should be taken to compensate for the deficit caused by Russia's oil and gas exports in the energy sector, International Energy Agency (IEA) head Fatih Birol said on Monday.
He said there is an extraordinary situation in the energy markets right now, which requires taking extraordinary measures.
Speaking to Anadolu Agency (AA) before the G-7 summit, Birol said that urgent and important measures should be taken against the energy crisis that is affecting the entire world.
Oil prices increased on Monday as investors are closely following the G-7 meeting for decisions on Russian oil exports and a revival of the Iran nuclear deal.
International benchmark Brent crude was trading at $109.57 per barrel at 7:20 a.m. GMT for a 0.43% increase after closing the previous session at $109.1 a barrel.
American benchmark West Texas Intermediate (WTI) was at $108.02 per barrel at the same time for a 0.37% gain after the previous session closed at $107.62 a barrel.
The leaders of the G-7 countries discussed a price cap on Russian oil to tackle inflation and reduce dependence on Russia.
By setting a limit on the price Russia can charge for its oil, Western countries hope to curtail Moscow's revenues while at the same time allowing more oil supply to reach the global market.
Birol, further expressing that the next six months may be extremely difficult for the world economy, said that oil and natural gas prices may remain "high and volatile" in this process, and this may lead to a rapid increase in inflation and a global recession.
Emphasizing that there should be an emergency action plan in case Russia cuts down or completely cuts its natural gas shipments to Europe, Birol said, "This emergency action plan should include what the restrictions planned to be made on industry and residences are, and how to minimize the negative effects of this on economic life."
Expressing that there are a few important steps that can be taken in the short term to relieve the industry, Birol said: "Oil and natural gas producers need to release oil and natural gas that they do not have on the market without delay and contribute to the stabilization of the market, especially the large oil producers in the Middle East."
Secondly, Birol said: "some planned measures will need to be taken in the field of consumption. There may be practical measures such as lowering 1-2 degrees in the months of the year, or driving cars into traffic every two days."
Another step, according to the IEA head, may be to postpone the closure of nuclear power plants that are planned to be closed.
Birol stated that the steps to be taken against the "global energy crisis," which has its impact all over the world, should not worsen the climate crisis.
"Some countries and companies are planning to increase fossil fuel investments by taking advantage of the crisis. These investments have two risks. The first risk is that if you start these fossil fuel investments today, the first production will come to the market 5-10 years later, at the earliest. Then the demand for oil or coal will increase. It is an optimistic and risky assumption for these countries and companies to think that this will happen because of technological developments and the decisions taken by countries will be made to reduce the demand for fossil fuels."
Birol said there is also the climate risk.
"If these projects are realized, it will be almost impossible for the world to reach the zero-emission target by 2050," he added.
Birol said that many countries currently see coal as a solution to ensure energy security and that according to the latest study of the IEA, coal investments increased by 10% in the world.
"Using existing coal power plants for a few months in an emergency situation is a reasonable and justifiable move, but long-term coal investments are risky in terms of climate as well as business and profitability," Birol stressed.