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IEA Makes U-Turn, Sees World Weathering Lost Russian Oil Supply

Lower output from Russia due to the fallout from its invasion of Ukraine will not leave the world short of oil, the International Energy Agency (IEA) said on Thursday, as supply ramps up elsewhere and Chinese lockdowns tamp down demand.

This is contrary to previous statements by the agency.

According to former U.S. energy secretary Dan Brouillette, the gas deal between the U.S. and EU is important, but won’t be able to make up the shortfall from Russia.

The U.S. has promised that it will work with international partners to provide at least 15 billion cubic meters more liquefied natural gas (LNG) to Europe this year but that will barely suffice.  In reports published In 2021, by the international energy agency, the European Union imported 155 billion cubic meters of natural gas from Russia.

The agency has made a U-turn saying, “Over time, steadily rising volumes from Middle East OPEC+ and the U.S. along with a slowdown in demand growth is expected to fend off an acute supply deficit amid a worsening Russian supply disruption,” in its monthly oil report.

Slower products exports and falling domestic demand following sanctions means around a million barrels per day (bpd) of Russian oil was shut in last month – about half a million BPD less than the Paris-based agency forecast last month.

The IEA sees that figure rising to 1.6 million BPD in May, then 2 million in June, and nearly 3 million from July onwards if sanctions deter further buying or expansion.

Still, Russian exports rebounded in April by 620,000 BPD from the month before to 8.1 million BPD, the IEA said, back to their January-February average as Russian supply is rerouted away from the United States and Europe primarily to India.