Global oil supply crisis shows signs of cooling, shows IEA

Global oil supply crisis shows signs of cooling, shows IEA

The worst global oil supply crisis in decades is showing the first signs of cooling off, as the economic slowdown weighs on demand for the commodity.

At the same time, sanctions imposed on Russia’s oil industry are having less of an impact than expected on its production, according to an assessment by the International Energy Agency (IEA).

In a monthly report published on Wednesday (13), the IEA cut its forecasts of world demand for oil for this and next year.

For 2022, the estimate was reduced by 240 thousand barrels per day (bpd), to 99.18 million bpd, and for 2023, by 280 thousand bpd, to 101.32 million bpd.

In any case, the IEA expects the impact on demand to be modest, as China’s economic recovery helps offset declining consumption elsewhere in the world.

In addition, sanctions imposed against Russia for the war in Ukraine are hurting its supply less than expected, while production from the US and Canada is increasing, the agency says.

The IEA raised its forecast for global oil supply this year by 300,000 bpd to 100.1 million bpd. For Russian production alone, the agency raised its 2022 forecast by 240,000 bpd to 10.61 million bpd.

In the case of next year’s general supply, the projection was maintained at 101.1 million bpd.

For the offer outside the Organization of the Petroleum Exporting Countries (OPEC), which last Tuesday released its own report, the IEA raised its forecast for this year by 200,000 bpd to 65.5 million bpd, but reiterated the of 2023, at 65.6 million.

According to the IEA, world oil supply expanded by 690,000 bpd in June to 99.46 million bpd, thanks to Russia’s better-than-expected result.

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Global oil inventories remain at “critically” low levels, with recent advances concentrated in China, where refiners have scaled back activities due to falling demand amid lockdowns driven by Covid-19 outbreaks, the IEA warned in the monthly report.

The agency says that inventories in Organization for Economic Co-operation and Development (OECD) countries have recovered somewhat, thanks to significant releases of inventories by governments, but remain nearly 300 million barrels below the five-year average.

In the document, the Paris-based entity also advocates “strong intervention” of policies on energy use so that the global economic recovery is not threatened.

Source: CNN Brasil