The International Energy Agency (IEA) is monitoring developments in global oil markets, and has released a statement saying that markets are now adequately supplied, and that global spare production capacity remains at comfortable levels.
Further tightening of sanctions on Iran will have an impact on its export capacity. Iranian shipments of crude and condensates are running around 1.1 million bpd in April, 300 000 bpd lower than March, and 1.7 million bpd lower than May 2018.
As a result of OPEC’s high compliance rate with the agreed supply cuts in the OPEC+ group, global spare production capacity has risen to 3.3 million bpd, with 2.2 million bpd held by Saudi Arabia and around 1 million bpd by the UAE, Iraq and Kuwait.
Saudi Arabia’s output in March dropped to 9.8 million bpd after it cut far more than required under the OPEC+ supply cuts. That is more than 1 million bpd below the record high of 11.1 million bpd that Saudi Arabia pumped last November.
Total oil supplies from the United States are expected to grow by 1.6 million bpd this year. Furthermore, as infrastructure bottlenecks in the United States are easing, oil exports are now more able to keep pace with production trends.
OECD oil inventories at the end of February 2019 were at 2871 million barrels, which is above the five-year average.
However, the IEA notes that with global economic growth increasingly fragile, consumers and producers should take steps to avoid higher oil prices that will prove painful to all alike.
The IEA has stated that it will continue to monitor the oil market closely, advise member countries, and remain engaged with major producers and consumers.
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