Oil producer group OPEC+’s decision last week to curb production has pushed prices higher and could push the global economy into recession, the International Energy Agency (IEA) said on Thursday.
“The relentless deterioration of the economy and higher prices triggered by an OPEC+ plan to cut supply are dampening global demand for oil,” said the Paris-based agency, which includes the United States and other major consuming countries.
“With relentless inflationary pressures and interest rate hikes taking their toll, higher oil prices could be the tipping point for a global economy already on the brink of recession,” it added in its monthly oil report.
The agency’s warning highlights a disagreement with Saudi Arabia, the world’s biggest oil exporter and de facto leader of OPEC.
US President Joe Biden promised unspecified “consequences” for relations with Saudi Arabia after the OPEC+ move, but Riyadh dismissed the criticism and said the move was not political and aimed at balancing the market and containing volatility.
Actual supply losses are likely to be around 1 million barrels a day rather than the 2 million barrels announced by OPEC+, the bloc that unites the club of producers and allies like Russia, the IEA said.
Capacity restrictions affecting production in other OPEC members mean Saudi Arabia and the United Arab Emirates will deliver most of the reductions, the IEA said, while new G7 and European Union sanctions on Russia could further restrict global offer.
Source: CNN Brasil
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