Energy agency does not expect serious oil shortage due to war in Ukraine

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We won’t be without oil anytime soon as Russian production shrinks due to the war in Ukraine and sanctions against Moscow, the International Energy Agency (IEA) said on Thursday. There is less demand for oil in the world, and oil-producing countries in the Middle East and the United States can support some of the production.

Russia’s daily oil production fell by almost a million barrels in April, according to the IEA. Because of the war, Western countries are buying less and less oil from Russia and Russian oil companies are therefore reducing their production. Incidentally, Russia has sold more oil to China and India, and oil is still being sold to the European Union. As a result, billions continue to flow into Russian war chests.

The IEA estimates that Russian production will fall further this year as sanctions begin to weigh more heavily. From July, the agency expects three million fewer barrels to be pumped into the country each day. The EU is working on a total boycott of Russian oil. Before the invasion of Ukraine, daily production in Russia was around ten million barrels.

Global oil demand growth is being held back by the corona shutdowns in China, which means less oil is needed there. China is the world’s largest oil importer. The IEA estimates that average daily oil demand this year will be 99.4 million barrels. This represents an increase of 1.8 million barrels over last year.

IEA member states are also using their strategic petroleum reserves to bring more oil to market and thereby lower fuel prices at the pump.

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