Tipping point: International Energy Agency warns OPEC+ cuts have led to brink of global recession


The recent decision by the oil Organization of the Petroleum Exporting Countries (OPEC) and its related nations like Russia have brought the world to the “tipping point” for a global recession, according to the the International Energy Agency.

“The relentless deterioration of the economy and higher prices sparked by an OPEC+ plan to cut supply are slowing world oil demand, which is now expected to contract by 340 kb/d y-o-y in 4Q22. Demand growth has been reduced to 1.9 mb/d in 2022 and to 1.7 mb/d next year, down by 60 kb/d and 470 kb/d, respectively, from last month’s Report. World oil demand is now forecast to average 101.3 mb/d in 2023,” the IEA reported.

“The OPEC+ bloc’s plan to sharply curtail oil supplies to the market has derailed the growth trajectory of oil supply through the remainder of this year and next, with the resulting higher price levels exacerbating market volatility and heightening energy security concerns,” said the October oil market report.

“Benchmark crude oil prices spiked by around $14/bbl from a September low and Brent once again flirted with triple digits. With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the report said.

“The stronger economic headwinds have led us to lower our forecast for world oil demand growth for 2023 by 470 kb/d from last month’s Report, to 1.7 mb/d. Our revisions are underpinned by further downgrades to global GDP growth expectations from major institutions, with recession now expected in several European countries and risks increasing for emerging and developing economies. For this year, world oil demand growth has been further reduced, to 1.9 mb/d from 3.2 mb/d expected before Russia’s invasion of Ukraine. The still relatively robust headline figure masks a sharp slowdown underway, with demand now forecast to contract by 340 kb/d y-o-y in 4Q22, despite increased gas-to-oil switching in power generation and industry,” the group wrote, anticipating sluggish economies and war-related impacts.

“The decline in OPEC+ supply will be smaller than the announced 2 mb/d reduction in production targets, with the majority of the alliance’s members already producing well below their ceilings due to capacity constraints. Our current estimate is for a decrease of around 1 mb/d in OPEC+ crude oil output from November, with the bulk of the cuts delivered by Saudi Arabia and the UAE. Further production losses could come from Russia in December, when an EU embargo on crude oil imports and a ban on maritime services go into full effect. Russian officials have threatened to cut oil production in order to offset the negative impact of proposed price caps.”

In the past, spikes in oil prices have spurred a strong investment response leading to greater supply from non-OPEC producers.

But, the agency warned, “this time may be different. US shale producers, traditionally the most responsive to changing market conditions, are struggling with supply chain constraints and cost inflation – and, so far, they are maintaining capital discipline. This casts doubt on suggestions that higher prices will necessarily balance the market through additional supply.”

The IEA cautioned of energy security risks worldwide.

“Even taking into account lower demand expectations, it will sharply reduce a much needed build in oil stocks through the rest of this year and into the first half of 2023. At end-August, OECD industry inventories remained a steep 243 mb below the five-year average, at 2 736 mb. They would have been significantly lower had it not been for the release of 185 mb of IEA member country government stocks from March through August. The recent wave of market disruptors underscores that energy security is as important today as it was 48 years ago when the IEA was founded. Now, as then, commercial and residential consumers are taking measures to reduce their energy bills and those effort could well have a lasting impact on oil markets.”


  1. We are already there. Covid insanity added to green madness equals the crippling of the world economy.

    • If you sell oil, for which demand changes based upon economic output, and you see a global crash in economic output, shouldn’t you scale back production? If you don’t, the price of what you sell will crash. Oil was negative 18 mos. ago. OPEC reducing supply is exactly what Opec should do.

  2. Don’t blame the Saudis, they are just good at business.

    If a clueless President wants to cut all or most of our production and make us dependent on other sources, well you either had no idea what would happen or your handlers knew exactly what would.

    My belief is the latter.

    Then you are caught selling out the American public for your own political gain – Telling the Saudis to keep up production until after the elections. You reap what you sow but unfortunately for we citizens we take it on the chin which most politicians could care less about anyway. Either the voting populace wakes up or we are in a world of hurt sooner rather that later, say 1930’s Germany or worse. Somebody’s generation is going to pay the piper for the mess that years of politicians have kicked the can on.

    Brandon and his handlers seem to want it, maybe they have a dictator in mind because when things get bad enough and food is hard to come by along with the money being only worth the paper it is printed on well that my friends is when dictators come to power, as it has been proven throughout history. We are no different than any other nation except for our genius forefathers who knew what politicians wanted and tried to limit it the best way they could. It lasted a couple hundred years until the cockroaches figured out how to get out of the cabinet.

    “The American revolution was more than a rebellion against England it was a rebellion against the whole idea that some special anointed could tell everybody else what to do.” Thomas Sowell

  3. “But but but Biden says the economy is doing great……”
    Elections, even the stolen ones, have consequences.
    No doubt we will print some more money, buy more foreign oil and import more cheap Chinese products. Biden is claiming job growth because more people are going back to old, pre-Covid jobs. As for new production though….??
    ”Well see it’s not his fault see, the thing is, it’s a supply chain issue, because well..once the spending package is dispersed…..then, you know, prices will come down…” yadda yadda yadda.
    2023 is going to be worse than 2022 by all indicators. Inflation leads to recession. The economy will get worse as consumer spending slows due to high prices. The stock market will slump on lack of investor confidence, unemployment will rise and the country will be asking how we got here. Amtrak Joe got us here.

  4. If there was just some way we could get oil from a nearby source. You know, like in our backyard. That would be nice.
    Hmmmm. I wonder where? It certainly is a mystery.

  5. Facist, wacko environmental kooks and their co-conspirators in the Democrat Party are causing this recession because of their mindless climate action agenda. That IS the reason, folks.

    • You should pay more attention to the evidence of climate change. If you can’t see it and admit that humans are the cause, you’ll continue to be fooled.

      • The emperor (climate change) has no clothing………….. just speculation, based on conjecture, re-enforced by supposition.
        It’s the misuse of science to support an agenda for American communists to come into power from an artificially created crisis.
        More greenhouse gas, more plant growth. More plant growth, more oxygen, less greenhouse gas. The earth has been doing this balancing act for aeons. It will slowly catch up with our disruption.
        If the radical leftists push us into a global thermonuclear war, then “climate change” will be the least of our problems.

      • Show me the evidence Lucinda. This weatherman sees no evidence whatsoever of anthropogenic global climate change – I see a lot of cycles peaking together, and I see problems with local man-caused issues – as in the smog in southern california. But man-caused global climate change is merely a great selling point for leftist politicians and folks seeking grant money to study climate. So let’s try to clean up the air and water more and remember Hebrews 1:3 “The Son is the radiance of God’s Glory and the exact representation of His being, sustaining all things through His powerful word.” Not a license to rape the earth, but a call to worship God, respect and steward our resources.

  6. Don’t believe any federal agency statements they are lying. We are all ready in a global Recession caused by the federal government. Follow the money right to the wealthy. It’s the surfs against the king now. A two tiered society and we are the worker bees.

  7. No, OPEC+CUTS is not responsible for the impending Global Recession! Joe Biden’s Covid lockdowns & utterly asinine sanctions against Russia which have boomeranged back against the USA & Europe which are experiencing record levels of inflation and soaring energy prices, is responsible for the Global Recession. Joe Biden will surely go down in history as the worst President the United States has ever had the misfortune to endure!

  8. J”iden is not a very nice guy ex is tentially speaking. What did he just say so ex temp orarily speaking?

  9. Biden can always find another evil regime to buy oil from. Maybe the Venezuelans? He could crawl back to Putin and ask.

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