According to IEA, 3 million bpd of Russian oil products could be closed next month

FILE PHOTO: A worker walking past a pump jack at an oil field owned by the Bashneft company near Nikolo-Berezovka
FILE PHOTO: A worker walks past a pump jack at an oil field owned by the Bashneft company, near the village of Nikolo-Berezovka, northwest of Ufa, Bashkortostan, Russia January 28, 2015. REUTERS/Sergei Karpukhin/File Photo

March 16, 2022

By Noah Browning

LONDON (Reuters) – Three million barrels per day (bpd) of Russian oil and products may stay off the market from April following Ukraine’s invasion, the International Energy Agency (IEA) said on Wednesday as sanctions bite and buyers hold on back.

Rising commodity prices and sanctions on Russia “are expected to weigh noticeably on global economic growth” and impact inflation, the Paris-based IEA said, painting a bleak picture of shortages and uncertainty for the oil market.

It was the first monthly report on oil from the IEA, which represents 31 mostly developed nations but not Russia, as Russia’s invasion of its neighbor briefly pushed Brent crude to nearly $140 a barrel.

“We see total (Russian) exports falling by 2.5 million bpd, of which 1.5 million bpd is crude oil and 1 million bpd is products,” the IEA said in its monthly oil report.

Graphic: Russian crude oil and condensate production:

In addition, she forecast lower Russian domestic demand for oil products.

“These losses could worsen should bans or public criticism accelerate,” the Paris-based IEA said.

Russia exports 7-8 million barrels of crude oil and products daily.

Chart: Russian Oil Exports by Destination:

The IEA lowered its forecast for global oil demand for the second through 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 mark a third year of demand below pre-pandemic levels that the agency had previously seen in 2022.

Graphic: Requirement revisions by product:

The Ukraine crisis has exacerbated strained production capacity, and with top OPEC+ producers Saudi Arabia and the United Arab Emirates not fully opening their taps, the IEA does not expect production increases from the United States, Canada and other countries to fill the global undersupply be eliminated.

The world is set for a supply deficit of 700,000 barrels a day in the second quarter, the IEA said.

Inventories in the OECD countries in January were at their lowest level since April 2014, it said.

(Reporting by Noah Browning; Editing by Jason Neely) According to IEA, 3 million bpd of Russian oil products could be closed next month


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