The OPEC allows for consumer calls to pump more crude, but this only makes the oil market more nervous.
The reassuring assurances that came out of Saudi Arabia's promise last week to lead a substantial increase in production was swept away on Tuesday as the harsher US sanctions on Iran refocused the country. Attention on the global reserve of crude oil urgently.
"Reducing OPEC's spare capacity" leaves the "price risk more exposed upward," said Brian Singer, managing director of Goldman Sachs Group Inc.
Who has the juice?
Only a few countries have significant additional production capacity
Source: International Energy Agency
The inactive oil fields that the Organization of Petroleum Exporting Countries and its allies – mainly Saudi Arabia – can deploy in case of emergency have a total capacity of about 3.4 million. barrels a day, according to the International Energy Agency.
These reserves will be reduced as the group implements the strengthening of the supply of 1 million barrels per day. in Vienna last week. Saudi Arabia's plan to increase production to a a record 10.8 million barrels a day next month consume about 40% of its unused capacity, leaving the world a buffer equivalent to only 2.6% of the world supply.
This would limit OPEC's ability to respond to other disruptions – and there will be many more to come. Venezuela's production is expected to decline further as its economic crisis worsens. Earlier this month, Libya lost unexpectedly 400,000 barrels a day of production while a militia was attacking two key oil terminals, prompting another armed group to take control of part of the country's industry.
"This leaves us virtually without capacity, at a time when Iran is not the only problem," said Amrita Sen, chief oil analyst at Energy Aspects Ltd., during a press conference. a televised interview with Bloomberg. "The fall of Venezuelan production, Angola, Libya, Nigeria – there are many problems all over the world."
Washington's pressure for US allies to completely stop buying Iranian crude by November could take another 1.5 million barrels a day in the market, according to Energy Aspects Ltd., a consultant.
Record breaker
Saudi Arabia plans to pump record amount of crude oil in July
Source: JODI, OPEC
The dilemma of OPEC was evident in the price fluctuations on the crude oil markets on Tuesday. US futures markets have announced that Saudi Arabia is forecasting a sharp increase in production, to then break the $ 70-a-barrel mark for the first time in a month after the US state department has revealed all the pressure that he intended to apply to the Iranian oil industry.
