World Bulletin / News Desk

A dramatic decline in oil production in crisis-hit Venezuela could tip the global crude market into deficit, the International Energy Agency said Thursday, helping wipe away a glut that has depressed prices for years.

"With supply from Venezuela clearly vulnerable to an accelerated decline, without any compensatory change from other producers it is possible that the Latin American country could be the final element that tips the market decisively into deficit," the IEA said a report.

Global oil prices have swung wildly in recent years as producers struggled to meet demand only to flood the market with supplies as they tried to squeeze rivals out of business.

After collapsing to under $30 a barrel at the beginning of 2016, prices have gradually risen to above $60 as the OPEC cartel and Russia have restrained production to try to eliminate the glut in output.

Booming US production, primarily thanks to low-cost shale output, has helped cushion markets. 

But the crisis in Venezuela's government-led economy has decimated its oil sector.

The state's cash-strapped PDVSA oil company has been unable to properly manage its fields to maximise production, with output falling to half of what it was a decade ago.

The IEA forecast that the company could see output fall this year to the lowest level since the late 1940s.