Oil & Gas
THE International Energy Agency (IEA) on Thursday warned that a dramatic cut in oil production will have a serious impact on economy and energy security.
OPEC+, the oil cartel made up of most non-Western producers, said it would sharply cut production to stabilize the price of crude oil which has fallen significantly in recent months.
The group said starting from November, OPEC+ will produce 2 million barrels (159 litres each) less per day, after the fall in the price of crude due to concerns about a looming global recession.
“The massive reduction in supply by OPEC+ increases the risks to global energy security,” the IEA said in a report.
In its monthly report, it said the production cut was leading to higher price levels in the oil market and weighing on the global economy.
The IEA, while slamming the decision by OPEC+, which is dominated by Russia and Saudi Arabia, said “oil prices could be the tipping point for the global economy, which is already on the brink of recession.’’
U.S. President Joe Biden has voiced strong criticism of Saudi Arabia following the production cut, saying the decision to side with Russia could have consequences for the relationship with Washington.
The IEA lowered its forecast for global oil demand growth in 2023 by 470,000 barrels per day.
The oil market however reported that it would bring about a “stronger economic headwind” which was also due to high inflation in many industrialized countries and steeply rising interest rates. (dpa/NAN)
A.I
Tags: International Energy Agency OPEC+
