NEW DELHI: Oil exports of Russia declined to the lowest since March 2021, according to the monthly oil report of the International Energy Agency (IEA). The country’s oil exports declined 600 thousand barrels per day (kb/d) to 7.3 million barrels a day (mb/d) in June, and its estimated export revenues plunged by $1.5 billion to $11.8 billion, half the levels of a year ago.
The report noted that Russia may hold its proposed oil output cut in August as domestic demand rises seasonally. As the Western countries put sanctions on Russian crude export following the break out of Ukraine war, Russia diversified its supply.
The country exported to alternative markets including Africa, India, China and Turkey at a discounted price. India and China came out to be the biggest buyers of Russian crude. Meanwhile, the International Energy Agency also has lowered its 2023 oil demand growth forecast for the first time this year, citing macroeconomic headwinds and a deepening manufacturing slump.
“However, persistent macroeconomic headwinds, apparent in a deepening manufacturing slump, have led us to revise our 2023 growth estimate lower for the first time this year, by 220 ( kb/d). Buoyed by surging petrochemical use, China will account for 70% of global gains, while OECD (Organisation for Economic Co-operation and Development) consumption remains anaemic. Growth will slow to 1.1 mb/d in 2024,” reads the report.
The International Energy Agency report also noted that world oil demand is coming under pressure from the challenging economic environment, not least because of the dramatic tightening of monetary policy in many advanced and developing countries in the past one year.
According to the International Energy Agency (IEA) world oil supply rose 480 kb/d to 101.8 mb/d in June 2023. However, it is set to decline sharply this month as Saudi Arabia makes a sharp 1 million barrels per day (Mb/d) voluntary output reduction. For 2023, global production is forecast to increase by 1.6 mb/d to 101.5 mb/d, as non-OPEC+ (Organization of the Petroleum Exporting Countries) expands by 1.9 mb/d.