The International Energy Agency said Wednesday that global oil demand this year will be slightly lower than forecast because of strict Covid lockdowns in China, the world’s largest crude importer.

Russian oil production is expected to drop by 1.5 million barrels per day in April as a result of Russia’s invasion of Ukraine, according to the International Energy Agency, which provides energy policy advice to developed countries.

A sharp deficit “should be avoided,” according to the International Energy Agency (IEA) in a monthly report on oil markets.

After Russia’s invasion of Ukraine on February 24, wealthy countries have agreed to draw down emergency oil reserves to the tune of 120 million barrels, half of which will come from the United States. This is an attempt to cool rising crude prices.

Shanghai’s lockdowns raised fears that Chinese demand for oil would decline, but prices rebounded after restrictions were eased in some areas of the city’s largest city.

With China’s Covid cases surging, the International Energy Agency says it has “lowered its expectations for global oil demand” in the second quarter of 2022 and for the entire year 2022.

One factor contributing to the decline was lower-than-anticipated demand in the OECD member countries, a group composed primarily of developed countries.

An average daily demand for oil of 99.4 million barrels is now expected by the IEA in 2022, a decrease of 260,000 barrels from the previous estimate but a rise of 1.9 million barrels over last year’s.

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