Middle East OPEC producers and Russia can quickly boost crude production by around 1.5 million b/d to make up for Venezuela’s increasing output loss as well as the potential decline in Iranian oil output when US sanctions are implemented, a senior International Energy Agency official said Thursday. Keisuke Sadamori, IEA director for energy markets and security, said at an event in Tokyo: “A quick output boost could be expected mainly from OPEC member countries in the Middle East.” “These countries, which have intentionally cut production, have a capacity to boost around 1.2 million b/d in a relatively short time,” he said, adding Russia could boost output by around 300,000 b/d.
OPEC will meet June 22 in Vienna to decide on the future of its production agreement with 10 non-OPEC countries, led by Russia.
Asked about his outlook for the OPEC meeting, Sadamori said: “Under the current market conditions, a certain action is objectively needed to be taken to stabilize the [oil] market.”
IRAN, VENEZUELA RISKS
The IEA now expects Venezuela’s oil output could fall to 800,000 b/d or even lower next year, from 1.36 million b/d in May and following a 1 million b/d fall over the past two years. Sadamori said the agency also expected to see a “negative impact” on Iranian oil production from the US decision in May to reinstate sanctions. “[The US sanctions] will basically be based on the same clauses in the National Defense Authorization Act for the 2012-15 sanctions,” Sadamori said, adding it remained unclear about how exactly the US sanctions will be implemented.
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