The IEA said the siege by jihadists in Iraq had led to output falling by 260,000 barrels a day in June to 3. 17 million, after the fighting forced the closure of the country's biggest refinery at Baiji and slashed production from the giant Kirkuk field.
The IEA said however, that there are still risks that the militants could target the infrastructure. "Should ISIS militants strike the southern oil network - now churning out nearly all of Iraq's supply to world markets and generating most of Baghdad's revenue - Asia, which takes roughly 60 per cent of Basra Light shipments, would be most vulnerable," it said.
On the supply side, members of the OPEC cartel pumped out 40,000 barrels a day less in June to 30. 03 million on a daily basis, with decline in Iraqi output partly offset by small increases from Saudi Arabia, Iran, Nigeria and Angola.
The International Energy Agency has cut its forecast for 2014 oil demand to 92. 7 million barrels a day due to weaker than expected global economic growth.
International Monetary Fund chief Christine Lagarde hinted last week that the 3. 6 per cent global growth forecast for 2014 may have to be trimmed.
Read more here: Business Spectator