# In U-turn, IEA sees world weathering lost Russian oil supply Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-05-12 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: IEA says world faces no oil shortage despite Russian supply Meta Description: IEA predicts no major supply deficit as output ramps up and demand slows due to COVID-19 restrictions, deferring possible global crisis. URL: https://financedigest.com/in-u-turn-iea-sees-world-weathering-lost-russian-oil-supplyhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-05-12t082929z2lynxnpei4b0cdrtroptp4ukraine-crisis-iea-oil-1736815734527-compressed.jpg) By Noah Browning LONDON (Reuters) -The world will not be left short of oil even with lower output from sanctions-hit Russia, the International Energy Agency (IEA) said on Thursday, in a U-turn after it predicted a possible “global supply shock” in March. The IEA, after warning on March 16 that 3 million barrels per day (bpd) could be shut in from April, lowered that figure for a second time as it noted only 1 million bpd had gone offline. Production ramping up elsewhere and slower demand [growth due to China’s lockdowns will forestall a big](https://www.financedigest.com/bridge-the-gaps-in-big-data-and-cross-into-a-world-of-growth.html "Bridge the gaps in Big Data – and cross into a world of growth") deficit, the Paris-based IEA said. Over time, steadily [rising volumes from Middle East OPEC+](https://www.financedigest.com/oil-rises-on-prospect-of-opec-supply-cut.html "Oil rises on prospect of OPEC+ supply cut") and the U.S. along with a slowdown in [demand growth is expected to fend off an acute supply deficit amid a worsening Russian supply disruption,” the IEA said in its monthly oil](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside") report. The assessment by the Paris-based agency suggests the economic impact from further sanctions on Russian energy mulled by the [European Union](https://www.financedigest.com/explainer-why-malaysia-is-considering-a-ban-on-palm-oil-exports-to-the-european-union.html "Explainer-Why Malaysia is considering a ban on palm oil exports to the European Union") could be limited. Soaring pump prices and slowing economic growth are expected to significantly curb the demand recovery through the remainder of the year and into 2023,” the IEA said, adding that curbs [aimed at containing COVID-19 in China were driving](https://www.financedigest.com/maserati-aims-at-driving-margins-higher-before-any-spin-off-talk.html "Maserati aims at driving margins higher before any spin-off talk") an extended economic slowdown there. Reflecting slower products exports and falling domestic demand, around a million barrels per day (bpd) of [Russian oil](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks") was shut in last month – about half a million bpd less than the agency forecast last month. The [IEA sees that figure rising](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") to 1.6 million bpd in May, to 2 million in June and to nearly 3 million from July onwards if sanctions deter further buying or expand. The United [States and fellow IEA members pledged to release 240 million](https://www.financedigest.com/wizz-air-loses-fight-against-67-million-in-state-aid-for-romanian-rival.html "Wizz Air loses fight against million in state aid for Romanian rival") barrels of oil in their second tapping of emergency stores this year after the IEA sat out a U.S.-led release in November because it saw no major [supply disruption](https://www.financedigest.com/oil-prices-rise-on-supply-disruption-jitters-as-geopolitical-tensions-grow.html "Oil prices rise on supply disruption jitters as geopolitical tensions grow") at the time. \[L2N2WY2DE\] [Russian exports rebounded in April by 620,000 bpd from the month](https://www.financedigest.com/russian-services-activity-shrinks-for-third-month-running-in-dec-pmi.html "Russian services activity shrinks for third month running in Dec -PMI") before to 8.1 million bpd, the IEA said, back to their January-February average as supply was rerouted away from the United States and Europe, primarily to India. As it works on a ban on Russian oil, the European Union remained the top market for Russian [oil exports](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") last month, the IEA said, down just 535,000 bpd from the start of the year. The bloc now accounts for 43% of [Russian oil](https://www.financedigest.com/oil-prices-rise-after-opec-keeps-output-steady-russian-price-cap-imposed.html "Oil prices rise after OPEC+ keeps output steady, Russian price cap imposed") exports, down from around 50% then. (Reporting by Noah Browning; editing by Mark Potter and Jason Neely) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---