Author: Will Horner
Article: Original article
Date of publication: Tuesday, November 15, 2022
The International Energy Agency (IEA) said more than 1 million barrels a day of Russian crude exports will be taken off the market due to the sanctions, entering into force within weeks.
Russian crude exports, in particular to the European Union, were little changed last month. This happened despite the perspective of the EU imposing a restriction on Russian crude imports, along with elaborating a detached program to cut their prices.
In October, Russian exports to the EU stood at 1.5 million barrels a day, with 1.1 million barrels set to stop when the embargo goes into effect on Dec. 5, the IEA reported.
According to the agency, it remains to be seen how much of these supplies Russia can divert to customers in other countries. India, China and Turkey have been expanding their purchases of Russian oil at a discount. However, volumes have been stable in recent months, the IEA said. Meanwhile, supplies to the EU appear to be way larger for other countries to absorb.
The warning sounded since the agency had forecasted additional demand to come from China. The country is gradually loosening its Covid-19 restrictions, although overall growth in global demand would be weak as the economy is seen to be struggling.
The IEA raised its outlook for global oil demand in 2022 by 170,000 barrels a day, reaching 99.8 million barrels. In fact, the agency also revised its 2023 forecasts from 130,000 barrels to 101.4 million barrels a day.
Reduced oil output in Russia is going to hamper global production. Next year, total production is projected to recover slowly, unable to keep up with the growing demand for oil. The IEA said global output could rise to 100.7 million barrels a day in 2023, which is 100,000 barrels more than projected last month. But this figure is still 700,000 barrels a day less than expected.
Forecast: Brent is likely to grow