The International Energy Agency (IEA) expects a modest increase in global energy demand this year, to 1.5 million b/d versus the previous forecast for 1.4 million b/d, but the Paris-based organization noted that the ongoing turmoil in Venezuela could result in global oil demand outstripping global oil supply.
"Without any compensatory change from other producers it is possible that the Latin American country (Venezuela) could be the final element that tips the market decisively into deficit," the IEA said.
Venezuela holds the world’s largest proven oil reserves, but production has plummeted as the economic crisis has stalled business activity in the socialist nation.
The IEA expects Venezuela's crude output will fall to 1.38 million barrels per day (mb/d) by the end of 2018. With the exception of the 2002-2003 strike, this would be the country’s lowest oil output in 70 years.
Robust demand for oil should help offset increasing supply to keep the oil market roughly in balance, the agency said. On Wednesday, the Organization of the Petroleum Exporting Countries raised its forecast for the U.S. share of global oil production to rise by 130,000 b/d to an average of 5.72 million b/d in 2018.
The IEA's latest five-year outlook documented oil discoveries falling last year to a record low. After petroleum investments barely increased in 2017, the organization is projecting investment spending to grow by 6% in 2018.