The International Energy Agency notes that the decision of the OPEC+ group of oil producers to cut production led to higher prices and could push the global economy into recession.
It is reported by Reuters with reference to the agency’s report.
“The relentless deterioration of the economy and higher prices, fueled by the OPEC+ plan to cut supplies, are slowing global oil demand,” the monthly oil report said.
Analysts add that, given relentless inflationary pressures and higher interest rates, higher oil prices could be a game-changer for a global economy already on the brink of recession.
The agency’s warning highlights disagreements with Saudi Arabia, the world’s largest oil exporter and de facto leader of OPEC+.
US President Joe Biden promised uncertain repercussions for relations with Saudi Arabia following the OPEC+ move, but Riyadh dismissed the criticism and said the move was not political and aimed at balancing the market and curbing volatility.
Actual supply losses are likely to be around 1 million barrels per day, rather than the 2 million barrels announced by the OPEC+ bloc, the IEA said.