Citing energy production and consumption estimates for February 2012, a report which was prepared by the US Energy Department’s Energy Information Administration (EIA) noted on Wednesday that the global fuel consumption will on average be 3 million barrels per day (bpd) more than the international output if Iran quits the market.
However, the EIA added, if Iran remains in the market, the difference between consumption and production will only be 500,000 bpd.
The report was the first assessment issued under a December 31 law that requires the EIA to provide an update on the oil market conditions every 60 days.
“The EIA report highlights how tight the global market is,” said Trevor Houser, an energy analyst and partner at Rhodium Group, a New York-based economic research firm.
He added that, “with oil inventories and spare OPEC production capacity running low, [oil] consumers don’t have much buffer against additional disruptions in supply.”
The report also showed that the spare oil production capacity of the Organization of Petroleum Exporting Countries (OPEC) has dropped 33 percent in the first two months of this year compared with the same period in 2011.
The 12 members of the OPEC had an average 2.5 million barrels a day spare capacity during January and February 2012, down from 3.7 million a year earlier.
On December 25, 2011, Washington imposed new sanctions on Iran to penalize other countries for buying oil from Tehran or being in contact with the country’s Central Bank. The European Union followed suit by agreeing on new anti-Iranian sanctions on January 23 which include a ban on oil import from Iran by member states.
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The US Energy Department has warned that the exclusion of Iran from the global oil market by imposing sanctions on the Islamic Republic’s oil will widen the gap between the global oil supply and demand sixfold.
News ID 181548
