Iran Press/ Europe: The world’s foremost energy watchdog has just released a new report on the global outlook for oil, its first since Russia’s special military operation in Ukraine.
It predicts slower economic growth this year, but more opportunities for countries to transition away from oil altogether.
The International Energy Agency’s latest oil market report states that the military operation and the international sanctions that effectively cut off Russia from the global economy placed oil on the brink of a massive international supply crunch.
The IEA expects that missing Russian oil and the volatility of the market will “appreciably depress global economic growth.”
The IEA report announced that the agency had revised its own forecasts for the year’s oil production. In last month’s oil market report, the IEA predicted that oil output would reach 6.3 million barrels of oil a day this year, but in its newest update, that forecast has brought that number down by 1.3 million for the rest of 2022.
Russia is the third-largest oil-producing country in the world, according to an earlier IEA report, and it accounts for around 10% of the global supply. But Western sanctions against Russia and outright bans on the country’s oil scrambled global production forecasts and sent oil prices spiraling into volatility.
“The implications of a potential loss of Russian oil exports to global markets cannot be understated,” the March report read.
The IEA points out that, save for an unexpected reversal from other oil-producing countries to increase their output, this missing oil won’t be replaced any time soon, prime conditions for what the IEA calls the “biggest supply crisis in decades.”
Oil prices have already entered a realm of interminable volatility. They briefly soared just shy of $140 a barrel last week after the US announced to be banning Russian oil imports, a number not seen since the 2008 financial crisis, before plummeting back down below $100 by Tuesday.
But volatility remains a very real factor, and worst-case scenario forecasts put the barrel price of oil rising to as much as $240 by this summer.
Missing Russian oil and a realization among Western nations that Russian energy has propped up their economy for years will prompt renewed discussions on energy security and energy independence, according to the IEA.
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