The International Energy Agency says the Russian oil embargo will not cause a supply shock

Economy / May 12, 2022 / DRPhillF / 0

After warning the International Energy Agency on March 16 that 3 million barrels per day could be shut down from April, it lowered that number for a second time as it indicated that only one million barrels per day was out of business.

The Paris-based International Energy Agency said increased production elsewhere and slowing demand growth due to the shutdown in China would thwart a large deficit.

“Over time, steadily increasing amounts of OPEC+ in the Middle East and the United States coupled with slowing demand growth are expected to fend off severe supply deficits amid worsening Russian supply disruptions,” the IEA said in its monthly oil report.

Higher pump prices and slower economic growth are expected to significantly curb the recovery in demand for the remainder of the year to 2023, the International Energy Agency said, adding that restrictions aimed at containing Covid-19 in China are leading to an extended economic slowdown there.

Reflecting slowing product exports and sagging domestic demand, about 1 million barrels per day of Russian oil was shut down last month – about half a million less than the agency had previously forecast.

The International Energy Agency sees this figure rising to 1.6 million barrels per day in May, to 2 million barrels per day in June, and to nearly 3 million from July onwards if sanctions prevent further purchases or expansion.

The United States and fellow IEA members pledged to release 240 million barrels of oil in the second emergency storage exploits this year after the International Energy Agency issued a US-led statement in November that it had not experienced any major supply disruptions at the time. .

Russian exports rebounded in April by 620,000 barrels per day from the previous month to 8.1 million barrels, returning to their January-February average as supplies were redirected away from the United States and Europe, primarily to India, the International Energy Agency said.

The International Energy Agency said that while it was working on the Russian oil embargo, the European Union remained the main market for Russian oil exports last month, down just 535,000 barrels per day from the start of the year.

The bloc now accounts for 43% of Russia’s oil exports, down from about 50% at the time.

energy, IEA says - CNN, The Russian oil embargo will not cause a supply shock