Oil supplies from Russia will fall short of expectations over the next four years, adding to the supply concerns that have driven world oil prices to record highs this week.
Claude Mandil, executive director of the International Energy Agency, told the Financial Times that expectations for growth in Russian oil supply were too optimistic and that the Organisation of the Petroleum Exporting Countries would have to make up the difference.
He said: “To 2010 Opec would have to fill a higher gap. I am not sure that non-Opec supply will be that high and I mainly have in mind Russia but also some other non-Opec suppliers.”
He would not say by how much the IEA would reduce its Russian growth forecasts, but other analysts have slashed their expectations by as much as half.
Russia is the world’s second largest oil producer. Until a few years ago, it enjoyed double-digit supply growth, which has been critical in helping meet the recent surge in Chinese demand.
The caution over its future growth comes as oil prices have surged because of fears of a US attack on Iran and ongoing supply cuts in Nigeria and Iraq.
IPE Brent crude futures hit a record $69.70 a barrel yesterday, before slipping to $68.88 in mid-afternoon trading in London. The late sell-off extended to Nymex West Texas Intermediate, which fell from its intra-day peak of $69.45 to $68.55.
Oil and its by-products are among several commodities that are booming. Metal prices also struck record highs with benchmark copper prices in London reaching $6,005 a tonne. Zinc prices hit $2,980 a tonne, double the level in October. Gold hit a 25-year high of $604 a troy ounce, and silver reached a 23-year high of $13.01 a troy ounce.
Additional reporting by Alan Beattie