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 barrels a day (mb/d) in April, 300 000 barrels a day lower than March, and 1.7 mb/d 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 mb/d, with 2.2 mb/d held by Saudi Arabia and around 1 mb/d by the United Arab Emirates, Iraq and Kuwait.
Saudi Arabia’s output in March dropped to 9.8 mb/d after it cut far more than required under the OPEC+ supply cuts. That is more than 1 mb/d below the record high of 11.1 mb/d that Saudi Arabia pumped last November.
Total oil supplies from the United States are expected to grow by 1.6 mb/d 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 2,871 million barrels, which is above the five-year average.
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 will continue to monitor the oil market closely, advise member countries, and remain engaged with major producers and consumers. As ever, the IEA stands ready to act if necessary to ensure markets remain well supplied.