PARIS (dpa-AFX) - Oil demand cuts extended by countries such as Saudi Arabia and Russia will lead to a significant supply shortage, according to the International Energy Agency (IEA). This looms from September for the rest of the year, the IEA said in its monthly oil market report in Paris on Wednesday. Oil stocks could fall to uncomfortably low levels and rising oil prices could loom.

The Saudi and Russian decisions to extend their voluntary production cuts until the end of 2023 are proving to be a formidable challenge for oil markets, the IEA said. A noticeable price increase is already the result, it said. Production cuts by OPEC countries have recently been offset by higher supplies from producers outside the alliance, such as the U.S. and Brazil. Iran, which is still under sanctions, also increased its production, according to the IEA.

However, the increase in global oil demand now also expected could lead to a daily deficit of 1.24 billion barrels in the second half of the year. China is responsible for three-quarters of the increase in demand, according to the IEA. Demand growth is then expected to lose momentum in 2024, due in part to efficiency improvements, the further spread of electric cars and increased work-from-home./evs/DP/mis