The International Energy Agency (IEA) has said in its monthly report that it expects rising US oil production to offset the declining production in Venezuela and Iran.
The US Government recently decided to end its sanction waivers, which enabled some countries to continue importing Iranian oil for a limited period. While the IEA said this had contributed to a muddled outlook for future supply, it points at a clear willingness from other producers to fill in for any gaps in supply, even if only in response to clear consumer demand.
The report points at how in April, OPEC countries were producing well below the total mandated under their current quotas, and Saudi Arabia alone was under its quota by half a million barrels per day. It also revised down its predicted demand growth for 2019 by 90,000 bpd to 1.3 million bpd, which should help alleviate supply concerns, although it would still take global oil demand to over a 100 million bpd for the very first time.
According to the report, oil production in the US had been affected by maintenance in the Gulf of Mexico and lower rig counts, but the IEA believes US oil and condensate production will still rise by 1.7 million bpd in 2019, with 1.2 million bpd of this being crude oil, as shale operators like ExxonMobil – the maker of the gear and bearing oil Mobil SHC 630 – ramp up production. The IEA believes this, combined with rising production in other non-OPEC countries, will keep the markets well supplied.