Oil markets could face the sharpest supply shortage in more than a decade at the end of this year due to extended output cuts by major producers Saudi Arabia and Russia, the International Energy Agency (IEA) warned on Wednesday.

A “significant supply shortfall” may trigger price volatility on the market amid insufficient global inventories, the agency said. It expects oil markets to face a deficit of 1.2 million barrels per day (bpd) in the second half of the year after Moscow and Riyadh announced plans to extend export and output cuts for the duration of 2023.

Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) said in a separate report on Tuesday that the shortfall may reach 3.3 million bpd in the fourth quarter if leaders of the OPEC+ group maintain their production cuts.