The OPEC+ oil supply cuts threaten to tip the global economy into recession, the International Energy Agency said Thursday in a new report, as analysts also warned of heightened risks to energy security worldwide.
“The OPEC+ bloc’s plan to sharply curtail oil supplies to the market has derailed the growth trajectory of oil supply through the remainder of this year and next, with the resulting higher price levels exacerbating market volatility and heightening energy security concerns,” IEA said in its monthly oil market report.
“With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the group said.
IEA also slashed its forecast for oil demand growth in 2023 by 470,000 barrels per day, a 20% reduction from previous estimates, and dropped its oil demand forecast through the rest of 2022 by 60,000 barrels per day down to 1.9 million bpd — a sharp drop compared to the 3.2 million barrels per day forecast this year prior to Russia’s invasion of Ukraine.
BIDEN FACES GOP HEAT FOR REPORTED DEAL TO LIFT SANCTIONS ON VENEZUELAN OIL
The report also warned of further production losses expected in December, when both a European Union embargo on Russian seaborne crude imports and the G-7 oil price cap plan are slated to take effect, noting that Russian officials have threatened to slash oil production in order to offset the anticipated negative impact of proposed price caps.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
“The massive cut in OPEC+ oil supply increases energy security risks worldwide. Even taking into account lower demand expectations, it will sharply reduce a much needed build in oil stocks through the rest of this year and into the first half of 2023.”
