IEA: OPEC+ cuts could push the world into recession

The International Energy Agency said on Thursday that the decision of the OPEC + group of oil producers last week to curb production led to higher prices and could push the global economy into recession.

It stated in its monthly oil report that with persistent inflationary pressures and higher interest rates, higher oil prices could prove the turning point for a global economy already on the brink of deflation.

The International Energy Agency said in its report issued today, Thursday, that the decision taken by “OPEC +” last week to cut production pushed prices higher and may push the global economy into recession.

The Paris-based agency added that the “OPEC +” production cut of two million barrels per day last week would tighten the oil market further at a very weak moment with few additional sources of supply available to compensate.

noted that the impact of the cut will exacerbate a combination of higher oil prices and weakening global growth, both of which will undermine demand for oil in the long term.

The agency lowered its forecast for oil demand growth by 470,000 barrels per day for 2023 to 1.7 million barrels per day, and explained that oil demand growth has fallen steadily throughout the year and is expected to contract in the fourth quarter by 340,000 barrels per day.

The agency expects total oil demand to reach 99.6 million barrels per day this year, and 101.3 million barrels per day in 2023.