Latest News

IEA says market may lose 3 million bpd of Russian oil next month


© Reuters. FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann

By Noah Browning

LONDON (Reuters) – Oil markets could lose three million barrels per day (bpd) of Russian crude and refined products from April, the International Energy Agency (IEA) said on Wednesday, exceeding the one million bpd per day demand drop high prices are expected to cause.

The Paris-based watchdog said sanctions and buyer reluctance to purchase Russian crude were pushing up oil prices in a way that would hit personal budgets, drive up inflation, which has already hit multi-decade highs, and undercut economic recovery.

“The impact of loftier prices for oil and other commodities will … increase inflation, reduce household purchasing power and are likely to trigger policy reactions from central banks worldwide – with a strong negative impact on growth.”

“Surging energy and other commodity prices, along with financial and oil sanctions against Russia, are expected to depress world GDP and oil demand,” it said in a report.

It was the first monthly report on oil from the IEA, which represents 31 mostly industrialised nations but not Russia, since Russia’s invasion of its neighbour briefly sent Brent crude to a 14-year high of nearly $140 a barrel.

“We see a reduction in total (Russian) exports of 2.5 million bpd, of which crude accounts for 1.5 million bpd and products 1 million bpd,” the IEA said in its monthly oil report.

Additionally, it projected lower Russian domestic demand for oil products.

Graphic: Russian crude and condensate production:

“These losses could deepen should bans or public censure accelerate,” the Paris-based IEA said.

Russia exports 7 million to 8 million barrels of crude and products daily.

Graphic: Russian oil exports by destination:

The IEA lowered its forecast for world oil demand for the second to fourth quarters of 2022 by 1.3 million bpd. For the full year it cut its growth forecast by 950,000 bpd to 2.1 million bpd for an average of 99.7 million bpd.

That would mean a third year of demand below pre-pandemic levels. Previously, the agency had expected demand to recover in 2022.

Graphic: Demand revisions by product:

The Ukraine crisis has exacerbated the issue of limited output capacity.

Top OPEC+ producers Saudi Arabia and United Arab Emirates, which are rare among global producers, in having surplus capacity, are not fully opening their taps and the IEA does not expect output rises from Canada, the United States and others to eliminate global undersupply.

The world is set for a supply deficit of 700,000 bpd in the second quarter, the IEA said.

Storage levels in OECD countries in January stood at their lowest levels since April 2014, it said.

IEA says market may lose 3 million bpd of Russian oil next month

Disclaimer:Fusion Mediawould like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Putin says Russia will achieve goals in Ukraine, won’t bow to West

Previous article

U.S. and allies launch joint task force to tackle Russian oligarchs

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News