Africa-Press – Angola. The International Energy Agency (IEA) indicates in a report that the production cuts announced by OPEC and allied producers (OPEC+) increase the risk of accentuating an oil supply deficit expected in the second half of this year and could harm consumers and the global economic recovery.
Consumer countries represented by the IEA argue that tight supply raises prices and could threaten a recession, while OPEC+ blames Western monetary policy for market volatility and inflation that lowers oil prices.
“Oil market balance sheets were already heading for tightness in the second half of 2023, with the potential for a substantial supply deficit to emerge,” the IEA said in its monthly oil report.
“The latest cuts risk exacerbating these tensions by driving up oil and commodity prices. Consumers currently under siege from inflation will suffer even more from higher prices.”
OPEC+ branded its surprise cut decision a “precautionary measure” and, in a monthly oil report published on Thursday, OPEC cited downside risks to summer oil demand due to high inventory levels and economic challenges. .
The IEA expects global oil supply to fall by 400,000 barrels per day (bpd) by the end of the year, citing an expected production increase of 1 million bpd outside of OPEC+ from March, versus a decline of 1.4 million bpd from the producer block.
production on the rise
Rising global oil stocks may have influenced OPEC+’s decision, the IEA added, noting that the Organization for Economic Co-operation and Development’s (OECD) industry stocks in January reached their highest level since July 2021, on 2, 83 billion barrels.
The demand landscape will be distorted by lackluster growth in OECD countries and a demand recovery led by China following the relaxation of its Covid-19 restrictions.
Meanwhile, Russia’s oil exports in March reached their highest levels since April 2020, due to robust flows of oil products, the IEA said, despite a ban on maritime imports from the European Union and a policy of sanctions of price cap led by the United States.
Russia’s March revenue rose $1 billion month-on-month to $12.7 billion, but was still 43 percent lower than a year earlier, in part due to limited prices for its offshore oil exports.
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