New US sanctions may severely disrupt Russian oil supply chains, International Energy Agency says
Pravda Ukraine
The International Energy Agency (IEA) has warned that the latest US sanctions on Russia could significantly complicate its oil supply chains, potentially tightening the global market.
Source: Reuters, citing an IEA report
Details: Despite the sanctions, the IEA predicts an oil market surplus in 2025, as production growth in non-OPEC+ countries is expected to outpace moderate global demand growth.
The new US sanctions on Russia and Iran target companies handling over a third of these countries’ oil exports in 2024. However, the IEA has not yet incorporated the impact of these measures into its forecasts.
Quote from IEA report: “We maintain our supply forecasts for both countries until the full impact of sanctions becomes more apparent, but the new measures could result in a tightening of crude and product balances.”
More details: The announcement of sanctions and the likelihood of reduced supply have driven oil prices higher. Brent futures were trading at approximately US$81 per barrel on Monday, 13 January, an 8% increase since the beginning of the year.
This time, the IEA has taken a more cautious stance on the impact of sanctions on Russian oil supplies compared to March 2022, when it predicted a reduction of 3 million barrels per day – a forecast that did not materialise and was later revised.
The IEA also adjusted its demand forecasts. Global oil demand is expected to grow by 1.05 million barrels per day in 2025 (down from a previous estimate of 1.1 million), while the 2024 forecast has been revised upward to 940,000 barrels per day.
Economic challenges in China, the world’s second-largest oil consumer, and the rising popularity of electric vehicles are expected to restrain oil demand growth in the country in 2025.
Background:
- The US Treasury Department’s Office of Foreign Assets Control imposed sanctions on two of Russia’s largest oil companies, Gazprom Neft and Surgutneftegas, as well as ship insurance providers Ingosstrakh and AlfaStrakhovanie.
- Financial Times indicated that the measures include adding 183 shadow fleet vessels involved in exporting Russian energy resources to the blacklist.
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