Russia's oil exports rose in November ahead of a Dec. 5 price cap imposed by the G7, the European Union and Australia to curb Moscow's wartime revenue, the International Energy Agency (IEA) said on Wednesday.
However, lower global prices and steeper discounts for Russian oil meant Moscow's revenue fell by $700 million to $15.8 billion, the IEA said.
The Paris-based energy watchdog said it continues to expect the price cap to reduce Russia's oil output by 1.4 million barrels per day (bbl/d) next year. Russian output has consistently outstripped IEA predictions of blows to its output and exports.
"While lower oil prices come as a welcome relief to consumers faced by surging inflation, the full impact of embargoes on Russian crude and product supplies remains to be seen," the IEA said.
China is still headed for a contraction of its oil demand by 400,000 bbl/d to 15.4 million bbl/d this year, the IEA added, before recovering by almost a million bbl/d in 2023.
Global economic challenges and concerns over demand in top oil importer China have helped erase most oil price gains this year, but the IEA said demand in some areas was surprisingly robust.
China, India and the Middle East picked up some of the slack left by flagging oil uptake in Europe and elsewhere in East Asia, the IEA said.
"While restriction levels in (China) remain high, the stage is now set for a progressive reopening in 2023. We have raised our estimates for 2022 and next year’s growth by 50,000 bbl/d and 40,000 bbl/d, respectively."
The data prompted the IEA to raise its estimate for oil demand growth this year by 140,000 bbl/d to 2.3 million bbl/d and for next year by 100,000 bbl/d to 1.7 million bbl/d for a total of 101.6 million bbl/d.
"As we move through the winter months and towards a tighter oil balance in Q2 2023, another price rally cannot be ruled out," the IEA said.