The world will not run out of oil, despite international sanctions that reduce Russia’s production, said the International Energy Agency (IEA), after it lowered its predictions on pumping losses in the world’s second-largest exporter for the second month in a row.
The IEA now projects that a million barrels a day of production was lost in April, compared with 1.5 million it estimated last month and 3 million it anticipated in March, as some refiners in Europe avoided Russian oil from in the face of a future import ban.
Increased production elsewhere and slower demand growth due to lockdowns in China will prevent a large shortfall, according to the Paris-based IEA.
Steadily rising volumes from OPEC+ from the Middle East and the United States, coupled with slowing demand growth, are expected to avert a serious supply shortfall amid worsening disruption over time. of Russian supply,” the IEA noted in its monthly oil report.
The Paris-based agency’s assessment suggests the economic impact of new sanctions on Russian energy, which the European Union is considering, could be limited.
“Rising fuel prices and slowing economic growth are expected to significantly slow the recovery in demand in the remainder of the year and into 2023,” the IEA said, adding that restrictions aimed at containing Covid-19 in China were causing a prolonged economic slowdown in that country.
Reflecting the slowdown in product exports and the drop in domestic demand, last month there was a cut of around one million barrels per day of Russian oil, approximately half a million less than the agency forecast last month. .
The IEA expects that number to rise to 1.6 million in May, 2 million in June and nearly 3 million from July if sanctions deter further buying or are expanded.
The United States and other IEA members have pledged to release 240 million barrels of oil in their second emergency stockpiling this year, after the IEA refrained from a US-led release in November because it saw no disruption. important part of the supply at that time.
According to the IEA, Russian exports rebounded in April by 620,000 barrels per day from the previous month, to 8.1 million, returning to their January-February average, as supply was diverted from the United States and Europe, mainly to India.
While working on a ban on Russian oil, the European Union remained the main market for Russian oil exports last month, according to the IEA, down by just 535,000 barrels per day since the beginning of the year.
The bloc now accounts for 43% of Russian oil exports, up from 50% then.