The International Energy Agency (IEA) is warning that potential large-scale disruptions to Russian oil production is “threatening to create a global oil supply shock.”

This comes in light of tough sanctions imposed on Russia following its invasion of Ukraine and as buyers increasingly avoid Russian oil purchases.

“We estimate that from April, 3 mb/d (million barrels per day) of Russian oil output could be shut in as sanctions take hold and buyers shun exports,” the IEA said in its oil market report.

“OPEC+ [the Organization of the Petroleum Exporting Countries] is, for now, sticking to its agreement to increase supply by modest monthly amounts. Only Saudi Arabia and the UAE hold substantial spare capacity that could immediately help to offset a Russian shortfall.”

OPEC has been facing calls to ramp up production amid soaring energy prices. In its last meeting, the organization agreed to stick to their current plan of gradually increasing output by just 400,000 barrels per day (bpd) per month. It meets again on March 31.

“Surging commodity prices and international sanctions levied against Russia following its invasion of Ukraine are expected to appreciably depress global economic growth,” the IEA said, which cut its 2022 global oil demand outlook by 1.3 million barrels per day.

It warned that the industry is faced “with what could turn into the biggest supply crisis in decades.”

“Russia is the world’s largest oil exporter, shipping 8 mb/d of crude and refined oil products to customers across the globe,” it noted.