Saudi, Russian oil cuts to cause big supply shortfall: IEA

Saudi, Russian oil cuts to cause big supply shortfall: IEA

Oil cuts by OPEC+ allies Saudi Arabia and Russia will cause a "significant" global supply shortfall through the end of the year, raising the risk of further market volatility, the International Energy Agency said Wednesday.

The warning in the IEA's monthly market report comes a day after oil prices jumped following OPEC's own update showed that the gap between global supply and demand would be the widest since 2007.

In an effort to prop up prices, Saudi Arabia and Russia, its ally in the wider OPEC+ group, announced earlier this month that they would extend voluntary cuts until the end of the year.

"From September onwards, the loss of OPEC+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter," the Paris-based IEA said.

"Oil stocks will be at uncomfortably low levels, increasing the risk of another surge in volatility that would be in the interest of neither producers nor consumers, given the fragile economic environment," it added.