Global economic growth is expected to be hit by a combination of rising commodity prices, a lack of supply from Russia and sanctions on Moscow, the International Energy Agency (IEA) said on Wednesday.
Oil prices soared to $140 a barrel after Russia’s unprovoked invasion and attack on Ukraine on fears of supply disruption as the West moved to punish the Kremlin with economic sanctions.
The IEA said almost three million barrels per day (bpd) of Russian oil and products may not reach the market beginning from next month.
“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 and forecast lower Russian domestic demand for oil products.
“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.
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 which the agency had previously seen recovering in 2022.
The Ukraine crisis has exacerbated stretched output capacity and with top OPEC+ producers Saudi Arabia and United Arab Emirates not fully opening their taps, the IEA does not expect output rises from the United States, Canada and others to erase global undersupply.
