An oil rig.
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Russia’s growing isolation will not create an “acute” crisis in the global oil supply as production from other countries is on the rise and demand from China is on the decline, the International Energy Agency said Thursday.
The IEA, which previously warned that Moscow’s invasion of Ukraine could trigger a global supply “shock”, said EU and G7 plans to ban Russian oil imports ” they will accelerate the reorientation of trade flows “and force Russia to reduce production.
“Even so, steadily increasing production elsewhere, coupled with slower growth in demand, especially in China, should fend off an acute short-term supply deficit,” the agency, which advises developed countries, said in a statement. monthly report.
After supply dropped by nearly one million barrels a day in April, losses could rise to as much as three million barrels a day in the second half of the year, the agency said.
The United States and other wealthy nations have decided to tap into their emergency oil reserves in an effort to tame crude oil prices.
The Russian invasion of Ukraine on February 24 sent oil prices soar, but a rigorous Covid-19 blockade in China, the world’s largest crude oil importer, has weighed on demand since then.
The IEA said “steadily increasing” production by the United States and Middle Eastern members of the OPEC + oil cartel will help offset losses from Russia.
Excluding Russia, world oil production is set to grow by 3.1 million barrels per day from May to December.
Growth in world oil demand, meanwhile, is expected to slow to 1.9 million barrels per day in the second quarter, more than half the first three months of the year.
But it is expected to rise again from April to August as fuel consumption for driving and aircraft increases during the holiday season.
Demand for 2022 is expected to reach 99.4 million barrels per day, an increase of 1.8 million barrels per day.
The OPEC oil cartel also cut its demand forecast on Thursday, saying it expects an increase of 3.4 million barrels a day to an average of 100.3 million by 2022, or 100,000 barrels above pre-demand demand. pandemic in 2019.