OPEC+ production cuts are likely to drive up oil prices and inflict more pain on consumers already squeezed by high inflation, the International Energy Agency said.
Global oil markets — already on track for a supply deficit before Saudi Arabia and its partners unveiled the surprise curbs — will tighten more than previously expected, forcing hefty inventory withdrawals of about 2 million barrels a day on average in the second half of the year, according to the agency.
“Oil market balances were already set to tilt into a substantial deficit,” the Paris-based IEA said in its monthly report on Friday. “The latest cuts risk exacerbating those strains” and “consumers currently under siege from inflation will suffer even more from higher prices.”
Saudi Arabia and its OPEC+ partners shocked crude traders and sent prices rallying when they agreed to fresh output curbs of more than 1 million barrels a day on April 2. Brent futures are trading near $86 a barrel, shoring up revenues for the Organization of Petroleum Exporting Countries while reviving inflationary pressures for the world economy.
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