In its recent monthly report, the International Energy Agency (IEA) highlighted Brazil’s potential role in balancing the worldwide oil supply by 2024.
This would counteract the production reductions initiated by countries like Russia and Saudi Arabia under the OPEC+ agreement, which aims at maintaining elevated oil prices.
Based in Paris, the IEA adjusted its forecast for the global oil supply, projecting an increase to 1.5 million barrels per day in 2024—an upswing of 300,000 barrels compared to previous estimates.
This surge is largely attributed to Brazil, the United States, and Guyana.
In July, combined exports from these three nations saw a 15% growth compared to the previous year.
Simultaneously, the IEA anticipates a tempered demand in the upcoming year, which might also help stabilize oil prices.
They forecast the oil demand to rise by 1 million barrels daily in 2024, a significant reduction compared to the growth observed in 2023 and 150,000 barrels daily less than last month’s prediction.
Such projections decrease the anticipated supply deficit for 2024 to 200,000 barrels daily, a considerable dip from the 700,000 barrels deficit noted this year.
According to the agency, this outlook offers relief to economies grappling with sustained inflation effects and intends to prevent a resurgence of soaring oil prices like those observed after the outbreak of the conflict in Ukraine.
The IEA mentions, “The global economic environment remains challenging due to rising interest rates and limited banking credit, which is affecting businesses already dealing with a downturn in activity and trade.”
However, before this stabilization, oil prices are predicted to climb further this year. The production reductions by OPEC+ members are expected to diminish global reserves.
The IEA foresees global stockpiles decreasing by 2.2 million barrels daily in this year’s third quarter and by 1.2 million in the fourth quarter, assuming the current cutbacks persist.