IEA warns oil producers against playing 'Russian roulette'

FILE PHOTO: International Energy Agency Executive Director Fatih Birol speaks during the "Rome 2015 MED, Mediterranean dialogues" forum in Rome, Italy, December 11, 2015. REUTERS/Max Rossi/File Photo

(Reuters) - The International Energy Agency Executive Director Fatih Birol said that “playing Russian roulette in oil markets may well have grave consequences”, adding that oil prices below $25 a barrel would lead to stop in new U.S. shale development.

Birol’s comments came as oil prices dropped by more than a quarter and were set for their biggest one-day fall in 29 years after Saudi Arabia ignited an crude price war in the market. [O/R]

He added that the agency sees the potential for an oil overhang of 3.5 mln barrels per day (bpd) in first quarter due to the coronavirus outbreak.

Reporting by Ron Bousso, writing by Louise Heavens