The worst recession in decades will curtail oil demand for years to come, the International Energy Agency predicted on Monday as it cut sharply its forecasts for world consumption and declared that the threat of a supply crunch had receded.

The slowdown in demand growth means the crucial cushion of spare supply the Opec oil producers’ cartel holds is now expected to reach 7.78m b/d next year, or 8 per cent of global demand. Last year, the IEA expected surging energy usage to reduce that supply cushion to 1.67m b/d.