Further oil production cuts will significantly worsen market conditions, agency warns

Further cuts to oil production in countries outside the Organization of the Petroleum Exporting Countries (OPEC) in the fourth quarter will significantly worsen market conditions. The International Energy Agency (IEA) said this today in its regular monthly report. Saudi Arabia and Russia in particular are expected to keep production cuts in place until the end of the year. The latter is not an OPEC member, but is an ally of the organization.

The IEA also stands by its previous forecast that oil demand will increase this year and next. The OPEC+ group, which includes OPEC and its allies, including Russia, is cutting oil production in an effort to achieve higher market prices.

OPEC+ began limiting oil supplies to the global market last year. North Sea crude Brent, a key benchmark for global oil prices, was trading above 92 dollars per barrel this morning. It first rose above USD 90 this year after Riyadh and Moscow recently announced that they would extend voluntary oil production cuts until the end of this year. The cuts amount to a total of 1.3 million barrels per day.