The International Energy Agency (IEA) on Thursday warned that a dramatic cut in oil production would seriously impact the economy and energy security.

OPEC+, the oil cartel made up of most non-Western producers, said it would sharply cut production to stabilise the price of crude oil, which has fallen significantly in recent months.

The group said that starting from November, OPEC+ will produce two million barrels (159 litres each) less per day after the crude price fall due to concerns about a looming global recession.

“The massive reduction in supply by OPEC+ increases the risks to global energy security,” the IEA said in a report.

In its monthly report, the agency said the production cut led to higher price levels in the oil market and weighed on the global economy.

The IEA, while slamming the decision by OPEC+, dominated by Russia and Saudi Arabia, said “oil prices could be the tipping point for the global economy, which is already on the brink of recession.’’

U.S. President Joe Biden has voiced strong criticism of Saudi Arabia following the production cut, saying the decision to side with Russia could have consequences for the relationship with Washington.

The IEA lowered its forecast for global oil demand growth in 2023 by 470,000 barrels per day.

The oil market, however, reported that it would bring about a “stronger economic headwind,” which was also due to high inflation in many industrialised countries and steeply rising interest rates. 

(dpa/NAN)