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The International Energy Agency (IEA) has said that the global oil market could see tightness in the second half of 2023, which would push oil prices higher.
Executive Director of IEA, Fatih Birol, made the prediction as oil prices surged above $80 since the beginning of the month, after the Organisation of Petroleum Exporting Countries (OPEC) and allies including Russia known as the OPEC+ surprised markets with an announcement of voluntary production cuts of 1.66 million barrels per day (bpd) from May until the end of 2023.
International benchmark Brent futures traded at about $87 a barrel last week, and US crude futures traded at about $83 a barrel.
Speaking at the Columbia Global Energy Summit in New York, he, however, stated that next winter was expected to be challenging for the region in terms of energy supplies.
Global markets have restructured after Russia invaded Ukraine last year, prompting sanctions on Russian energy that forced countries to look elsewhere for barrels.
Birol noted that Europe was particularly susceptible to declines in Russian supply, but a milder winter helped avoid a worst-case scenario this year.
