The International Energy Agency (IEA), has predicted that the global oil market could see tightness in the second half of 2023 with the attendant implications for higher oil prices.
The agency’s Executive Director, Fatih Birol, made this prediction as oil prices surged above $80 since the beginning of the month, after the Organization of the Petroleum Exporting Countries and allies (OPEC+) member-countries, including Russia, jointly announced production cuts of 1.66 million barrels per day (bpd) from May until the end of 2023.
Current developments in the global oil markets showed that the market had restructured after Russia-Ukraine war last year, prompting sanctions on Russian energy that forced countries to look elsewhere for barrels.
The IEA’s boss noted that following the Russian invasion of Ukraine, Europe particularly experienced disruptions in Russian supply, but a milder winter helped avoid a worst-case scenario this year.
However, the industry experts, in his address at the Columbia Global Energy Summit in New York last Wednesday predicted that next winter would be challenging for the region in terms of energy supplies, adding that Europe should be able to do without Russian liquefied natural gas.
According to Birol, global fossil fuel consumption could rebound before the late-2020’s based on the current developments in the industry.
It would be recalled that Russia had announced plans in February to cut its oil output by 500,000 barrels per day (bpd) from an output level of 10.2 million bpd.
