PARIS: Global oil demand will rise more than previously forecast this year as heat waves and soaring gas prices are prompting countries to switch fuels for power generation, the International Energy Agency (IEA) said on Thursday.

Oil prices have dropped by $30 a barrel from a peak in June due to growing supplies and “escalating concerns over the deteriorating economic outlook,” the Paris-based agency said in a monthly report.

Meanwhile, prices of natural gas and electricity have jumped to new records, prompting some countries to switch to using oil, it added.

“With several regions experiencing blazing heat waves, the latest data confirm increased oil burn in power generation, especially in Europe and the Middle East, but also across Asia,” the agency said.

“Fuel switching is also taking place in European industry, including refining,” added the IEA, which advises developed countries on energy policy.

Consequently, the IEA raised its demand forecast by 380,000 barrels daily.

Demand is now seen rising by 2.1 million barrels daily to a total of 99.7 million barrels a day in 2022. It will reach 101.8 million barrels daily next year, exceeding pre-coronavirus pandemic levels.

The IEA said European oil deliveries were being boosted by “exceptional demand” for heat and power generation and in industry.

The report comes as a European Union plan to cut gas consumption across the 27-nation bloc by 15 percent took effect on Tuesday.

The effort is aimed at coping with the energy price crisis spurred by Russia’s invasion of Ukraine, which began on February 24.

EU members also fear Russia may cut gas supplies during winter in retaliation to Western sanctions imposed on the country over the ongoing war.

The IEA said the heat waves and “the beginning of what may be a major rise in gas-to-oil switching under new EU guidelines in response to uncertainty surrounding gas supply from Russia are augmenting fuel oil and gasoil use.”