Chronicle of raw materials

Oil: can Russian barrels be replaced?

Audio 01:43

An oil refinery in Tartarstan, Russia.

© REUTERS/Sergei Karpukhin

By: Marie-Pierre Olphand Follow

2 mins

The International Energy Agency is concerned about global oil supply.

Russian barrels will miss and can hardly be compensated in the short term, according to the IEA.

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The International Energy Agency announces dark hours for oil supply: disruptions in Russian supply could create " 

", even predicts the IEA.

In other words, a greater imbalance between supply and demand than it is today.

The deficit in Russian supply is far from trivial: the country is the world's second largest exporter with 8 million barrels per day.

But since the war, Moscow can no longer sell all its crude, certain countries or trading partners refusing to buy Russian oil.

OPEC+ strategy contributes to market tension

The IEA envisages a loss for the market of 3 million barrels a day from April.

A volume that could increase if the sanctions become more severe.

But for now, these losses will be difficult to compensate.

OPEC and its allies, including Russia, are refusing to increase their production to relieve the market.

OPEC+ is sticking to its gradual increase of 400,000 barrels a day each month for now.

Outside of OPEC+, the potential is limited: Brazil, Canada and the United States will only be able to make a modest contribution.

The disaster scenario may be avoided, given the demand that the IEA is revising downwards, for 2022, to the tune of one million barrels less every day.

But this adjustment will not be enough to offset the deficit.

Especially since the already existing undersupply is itself a driver of demand.

Concerns that drove prices up 7%

The worrying assessment of the IEA contributed to a rebound in the markets.

Both price benchmarks were up around 7% on Thursday, back above the $100 a barrel mark.

This new rise is also maintained by the fear of additional sanctions against Russia, the longer the war continues, which would only accentuate the disturbances of the Russian oil sector.

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