The 23-member bloc’s prolonged underperformance has effectively taken 300 million barrels, or 800,000 barrels per day, off the market since the start of 2021, the Paris-based agency said in its monthly market report on Friday.
“That shortfall is expected to deepen as some Opec+ members struggle with production constraints, exacerbating market tightness,” it said.
Oil prices have rallied on a faster-than-expected economic recovery, resulting in higher demand and the inability of some OPEC member countries to quickly ramp up production due to underinvestment in the industry. Rising geopolitical tensions over Ukraine have also boosted prices.
Brent, the global benchmark for two thirds of the world’s oil, jumped 3.31 per cent to trade at $94.44 per barrel when markets closed on Friday. West Texas Intermediate, the gauge that tracks US crude, was trading 3.58 per cent higher at $93.10 per barrel.
“If the persistent gap between Opec+ output and its target levels continues, supply tensions will rise, increasing the likelihood of more volatility and upward pressure on prices,” the report said. However, these risks, “which have broad economic implications, could be reduced if producers in the Middle East with spare capacity were to compensate for those running out”.
The IEA’s projections come as investment in the oil and gas sector drops amid green transition efforts by the governments. Total investment in the upstream sector of the oil and gas sector fell 23 per cent below the pre-coronavirus levels to $341 billion in 2021, a new report said.
Despite higher demand and the recurring failure of OPEC+ to meet its targets, the market is still set to shift to surplus in 2022, the IEA said.