International Business: Russian oil supply set to plunge in May says IEA – Gulf Digital News

International Business: Russian oil supply set to plunge in May says IEA – Gulf Digital News

LONDON: The impact of sanctions and buyer aversion on Russian oil will take full effect from May onwards, the International Energy Agency said yesterday.

Countering that, expected lower demand in China, output increases from Opec+ producers and beyond plus a record draw on emergency oil storage by the US and its IEA member allies ought to prevent any sharp deficit, the agency said.

Global demand is now expected to be balanced with supply in the second quarter at 98.3 million barrels per day (bpd), the agency added, with the potential to calm soaring energy price inflation. It had previously expected market balance to be next achieved in the fourth quarter.

“For now, we assume (April) losses will grow to an average 1.5m bpd for the month as Russian refiners throttle back further and buyers shy away,” the Paris-based body said.

“From May onwards, close to 3m bpd could be offline as the full impact of a widening customer-driven voluntary embargo on Moscow comes into effect.”

The Russian shut-in is proceeding more slowly than the IEA predicted last month, when it forecast that the 3m bpd loss would take effect from April.

Some buyers, especially in Asia, have increased purchases of Russian oil, but there is no