Bloomberg US news agency reported on Sunday that Iran’s oil exports had declined nearly to one third since US President Donald Trump announced the reimposition of sanctions on Tehran following his withdrawal from the nuclear weapons deal in May.
Bloomberg’s report explained that Iranian oil exports reached less than 2 million barrels per day in August, which could push prices to more than $ 80 per barrel.
According to the report, the OPEC member states have sufficient spare capacity to compensate for Iran’s lack of supposed exports, but raising production may take months.
The report pointed out that, theoretically, Saudi Arabia could raise production to 11.5 million barrels per day. However, the kingdom has never had to produce as much, and the increase in production with such quantity could take months and large drilling operations.
Russia, which is not a member state of OPEC, raised its production by 250 thousand barrels per day in May and can increase the supply by about 300 thousand barrels per day. However, it is less likely to take any decision before the OPEC meeting and other producing countries which will be held in Algiers later in this month, according to the report.
Bloomberg quoted oil analysts as saying that the world demand for OPEC crude oil will reach 33.5 million barrels per day in the fourth quarter of this year, while its current production is estimated at 32.7 million barrels per day.
They pointed out that there is concern about the oil demand due to the slowing economies of some developing countries and trade wars caused by President Donald Trump, but the impact of these factors on the oil market will not appear before next year.
“The next winter may be very hot for the global oil market,” the report concluded.
Washington has re-imposed some financial sanctions on Iran from August 6, while sanctions that would affect Iran’s oil sector will come into force on November 4.