Iranian oil exports are likely to fall by nearly half within six months, the IEA said Wednesday, March 14 while holding its estimate of global oil demand steady for the first time in six months, AFP reported.
The report underscored two forces in the oil market, where prices have risen sharply, pushing up energy costs in many sectors.
These are the effect of EU sanctions against Iran and other disruptions to supply together with tighter market conditions.
For a long period the underlying tone of IEA monthly reports has been dominated by the outlook for slower economic growth, which weakened prospects for growth of oil demand.
The IEA said Wednesday that it expected Iranian exports to fall to about one million barrels per day (mb/d) after the middle of this year.
The International Energy Agency cited industry experts who were “expecting exports of Iranian crude to ultimately be curtailed by around 800 kb/d (thousand barrels per day) to 1.0 mb/d from mid-year onwards.”
But the agency added in its monthly report that subdued economic activity and high prices would restrain upward pressure on consumption.
Overall, therefore, the IEA kept its 2012 forecast for growth in oil demand unchanged at 800 kb/d, the first time for six months that it has not reduced its estimation.
In absolute terms, global demand for oil this year was forecast at 89.9 mb/d, the agency said in its first report since Greece secured a rescue deal from public and private creditors, brightening prospects for the eurozone economy.
However, the IEA underscored “a heady brew of both real and anticipated supply-side risks, alongside a very evident tightening in actual market fundamentals that has been underway since mid 2010.”