IEA allowed a significant deficit in the oil market due to OPEC + disagreements

The global oil market is threatened by the struggle of exporters for market shares and the risk of accelerating inflation, which could harm the recovery of the economy, which was hit by the covid-19 pandemic . This is stated in the July Oil Market Report of the International Energy Agency (IEA).

The agency believes that disagreements within OPEC + can lead to an oil shortage. If the OPEC+ countries keep oil production at the level of July in August, the oil market will “significantly shrink”, experts believe.

The IEA expects that markets will likely continue to experience volatility until an OPEC+ decision on production is made. This volatility is not in the interests of either producers or consumers, the report emphasizes.

As the agency notes, due to disagreements between Saudi Arabia and the UAE, production volumes in August will not change, although consumption has increased again after the pandemic. The IEA noted that the conflict between Riyadh and Abu Dhabi arose at an extremely unfortunate moment, since the excess oil accumulated during the CORONAVIRUS crisis has been used up, and now the reserves are at below average levels.