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Oil markets can withstand sanctions on Russia, says top energy agency, walking back its warning of a 'global supply shock'
Phil Rosen
Thu, May 12, 2022, 11:46 AM
Shell gas station.
Maksim Konstantinov/SOPA Images/LightRocket via Getty Images, Mikhail Klimentyev/Sputnik/AFP via Getty Images
The International Energy Agency said the world can withstand lower oil output from Russia amid wartime sanctions.

This counters the IEA's previous warning of a potential "global supply shock."

Meanwhile, OPEC cut its 2022 global oil demand growth forecast by 310,000 barrels per day.

After predicting a "global supply shock" in March, the International Energy Agency reframed its outlook Thursday, saying the world will be able to withstand lower oil output from Russia amid wartime sanctions.

"Over time, steadily rising volumes from Middle East OPEC+ and the U.S. along with a slowdown in demand growth is expected to fend off an acute supply deficit amid a worsening Russian supply disruption," the IEA said in its monthly report.

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The Paris-based agency had previously warned of the prospect of "large-scale disruptions" to Russian supply and production, forecasting that upwards of 2.5 million barrels per day of exports could be at risk.