Oil supply may lag demand in the second half of this year as sanctions make it more difficult for Russia to export oil. The International Energy Agency writes this in a new report.
In it, the organization from Paris writes that the end of strict corona lockdowns in China will lead to a stronger increase in demand for oil.
“Global supply of oil looks set to outpace demand in the first half of 2023, but that balance could soon shift if demand rebounds and some Russian oil remains in the country,” the agency writes in its monthly oil markets report.
When oil supply is tight, the prices for that raw material will rise. This could lead to higher petrol and diesel prices.
According to the IEA, oil demand will rise by 2 million barrels per day this year, more than in previous forecasts. Almost half of that increase is due to the reopening of the Chinese economy, which, for example, means that transport companies need more fuel and factories run faster
Western powers imposed sanctions on Russian oil in response to that country’s invasion of Ukraine. Earlier this month, for example, a ban came into effect for European Union member states to import processed oil products such as diesel from Russia by sea. That measure and a price cap on Russian oil that goes elsewhere should prevent the Kremlin from boosting its war chest with oil revenues.
The IEA writes that these measures will probably allow Russia to export 1 million barrels less per day. But according to the agency, much is still unclear about the effects of the boycotts and the price cap on trade flows.