The group of oil-producing countries reduced output at the start of this year as part of an agreement with other producers, such as Russia, to prevent an oil glut forming amid faltering demand and surging US shale production.
Monday 05, August 2019
The Organisation of Petroleum Exporting Countries’ (OPEC) output, already at the lowest since 2014, slid again last month as US sanctions took a further toll on exports from Iran, reported Bloomberg.
Iran has been pumping the least crude since the mid-1980s as the US imposes penalties on any country or company that deals with Tehran, part of President Donald Trump’s campaign to pressure the country over its nuclear programme.
Iranian production dropped by 70,000 barrels a day last month to 2.21 million a day, the biggest decline among the 14 members of OPEC though there were others too.
The group’s production fell by 130,000 barrels a day to 29.87 million a day, the lowest in five years, though changes in membership since then blur the comparison.
The strategy has shown mixed results. Although oil prices climbed almost 30 per cent in the first quarter of this year, they’ve since eased—at just under $65 a barrel in London are below the levels most OPEC nations need to cover government spending.
Prices have gained some support in recent weeks as Trump continues to pile diplomatic pressure on Iran, which has been accused of retaliating by seizing and targeting tankers passing through the Arabian Gulf.