Paris (AFP) - The world could face its biggest oil supply "shock" in decades as major crude exporter Russia is hit by sanctions over its invasion of Ukraine, the International Energy Agency warned Wednesday.
The Paris-based agency, which advises developed countries on energy policy, lowered its forecast for international oil demand for 2022, saying surging commodity prices and sanctions on Russia are expected to "appreciably depress global economic growth".
"Faced with what could turn into the biggest supply crisis in decades, global energy markets are at a crossroads," the IEA said in a monthly report.
"While it is still too early to know how events will unfold, the crisis may result in lasting changes to energy markets," it said.
Russia, the world's biggest exporter of oil, has been hit with a slew of international sanctions over the war in Ukraine, which sent oil prices soaring.
While the measures exclude the energy market, the IEA said major oil companies, trading houses, shipping firms and banks have "backed away from doing business with the country".
The United States and Britain have announced their own bans on Russian oil imports.
"The implications of a potential loss of Russian oil exports to global markets cannot be understated," the IEA said.
"The prospect of large-scale disruptions in Russian production due to wide-ranging sanctions as well as decisions by companies to shun exports after Moscow's invasion of Ukraine is threatening to create a global oil supply shock," it said.
Shortfall could worsen
The agency said Russian oil production could fall by three million barrels per day from April and could worsen if "restricions or public condemnation escalate".
There are also "scant signs of increased supplies coming from the Middle East, or of a significant reallocation of trade flows", it said.
The agency lowered its forecast for demand growth by nearly one million barrels per day.
It now expects world oil demand to grow by 2.1 million barrels a day to total 99.7 million barrels per day this year.
OPEC, the Saudi-led cartel of major oil producers, on Tuesday maintained its forecast for 2022 demand growing by 4.2 million barrels per day.
But the group warned that its forecast was "subject to change in the coming weeks, when there is more clarity on the far-reaching impact of the geopolitical turmoil".
OPEC and allies including Russia have only modestly increased output in recent months.
Crude prices soared to a 14-year high close to $140 following Russia's invasion of Ukraine but fell back under $100 this week.
