In U-turn, IEA sees world surviving loss of Russian oil supply

A gasoline pump hangs from the ceiling of a gas station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak

LONDON, May 12 (Reuters) – The world will not run out of oil even with a drop in production from sanctions-hit Russia, the International Energy Agency (IEA) said on Thursday, in a U-turn. after predicting a possible “supply shock” in March.

The IEA, after warning on March 16 that 3 million barrels per day (bpd) could be shut down from April, lowered that figure for the second time as it noted that only 1 million bpd had closed. disconnected.

Accelerating production elsewhere and slowing demand growth due to shutdowns in China will prevent a big shortfall, the Paris-based IEA said.

“Over time, steadily increasing volumes from OPEC+ from the Middle East and the United States, along with a slowdown in demand growth, should help address an acute supply shortfall in a backdrop of worsening Russian supply disruption,” the IEA said in its monthly oil report.

The Paris-based agency’s assessment suggests that the economic impact of new Russian energy sanctions being considered by the European Union could be limited.

“Soaring pump prices and slowing economic growth are expected to significantly dampen demand recovery through the rest 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 there.

Reflecting slowing commodity exports and lower domestic demand, about a million barrels per day (bpd) of Russian oil was shut down last month, about half a million bpd less than forecast by the government. agency last month.

The IEA sees that number rising to 1.6 million bpd in May, 2 million in June and nearly 3 million from July if sanctions deter buying or expanding.

The US and other IEA members have pledged to release 240 million barrels of oil in their second drawdown of emergency reserves this year after the IEA canceled a US-led release in November, as it saw no major supply disruptions at the time. L2N2WY2DE

Russian exports rebounded in April by 620,000 bpd from the previous month to 8.1 million bpd, the IEA said, returning to their January-February average as supply was diverted from the United States and from Europe, mainly to India.

While working on a ban on Russian oil, the European Union remained the top market for Russian oil exports last month, the IEA said, down just 535,000 bpd since the start of the year.

The bloc now accounts for 43% of Russian oil exports, up from around 50% at the time.

Reporting by Noah Browning; edited by Mark Potter and Jason Neely

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