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The increasing uncertainty surrounding oil supply disruptions darkens the prospects for OPEC's global supply for the rest of the year, a month and a half before the cartel does not decide to prolong its production cuts or increase its production to compensate for a significant fall expected in Iran. oil exports now that the US has ended all sanctions exemptions for Iranian customers.
The expected but not yet estimated losses of Iranian barrels, as well as the breakdown of an oil pipeline connecting Russia to Europe, give OPEC a headache regarding the forecast of oil prices. The scale of the reduction in the global oil supply in the second half of 2019, OPEC sources told Reuters.
The end of the US sanctions waivers for all Iranian buyers means that Iranian oil exports will fall as of this month, but no one is really sure of the amount. Several analysts expect Iran to continue shipping oil between 200,000 and 600,000 bpd, but that's not all that oil will be sold because it could be a refund of debt, and some of this oil should go unnoticed.
To make the task of OPEC even more difficult, Russia cut off Druzhba's gas supply in several European countries last month because of a contamination problem that the Russians had described as deliberate.
Russian production has been reduced due to the limitation of exports via the Druzhba pipeline.
According to one of Reuters sources at OPEC, the blackout in Russia could be "potentially important". Related: Iran's master plan to defeat US sanctions
Citigroup, admitting that it is difficult to estimate the impact of the blackout in Russia on global demand and supply, warns that some 400,000 barrels of Russian oil could be withdrawn from the market for a longer period than originally planned .
As if these failures were not enough, Venezuela's oil production and exports could also continue to decline in the coming weeks and months, while ongoing fighting in Libya could threaten oil facilities and exports. at one point.
All of these uncertainties over oil supply complicate OPEC decision-making as the deal and its allies prepare to convene a panel of technical committees later this month. in Jeddah, Saudi Arabia, to discuss the state of the oil market as well as supply and demand. balanced.
By Tsvetana Paraskova for Oilprice.com
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