LONDON
The International Energy Agency (IEA) on Monday warned that the new OPEC+ cuts risk straining the tight oil market and pushing up prices at a period of strong inflationary pressures hurting vulnerable consumers worldwide.
The IEA’s warning came following the decision by some OPEC+ countries’ decision to cut production by about 1.6 million barrels per day (bpd).
Saudi Arabia led the way with 500,000 bpd of cuts on Sunday, followed by the UAE with 144,000 bpd, Kuwait with 128,000 bpd, Iraq with 211,000 bpd, Oman with 40,000 bpd, Algeria with 48,000 bpd, and Kazakhstan with 78,000 bpd.
Russia joined the countries that it would extend the existing 500,000 bpd of output cuts until the end of this year.
“The significant new cuts in oil production announced by OPEC+ countries come during a period of heightened uncertainty for global oil markets and concerns about the outlook for the world economy,” the IEA said in a statement.
“Forecasts by the IEA and other relevant institutions, representing consumers and producers alike, all indicate that global oil markets were already set to tighten in the second half of 2023, with the potential for a substantial supply deficit to emerge.”
The new OPEC+ cuts risk exacerbating those strains and pushing up oil prices, the IEA said, stressing that the vulnerable consumers around the world and especially in emerging and developing economies are already under the strong inflationary pressures.
