The world's oil supply fell last month, the International Energy Agency (IEA) said Wednesday (May 15th), amid rising global tensions as US sanctions on Iran tightened and OPEC plus members produced less crude, AFP reported.
In its latest monthly report on the global oil market, the IEA said that while geopolitics and industry disruptions were clouding the outlook, it believes that the market balance is set to flip from surplus into deficit.
This would favour efforts by oil producing nations to keep prices high.
The IEA said Iranian crude oil output fell in April to 2.6 million barrels per day (mbd), the lowest level in over five years, and could tumble in May to levels not seen since the 1980s war with Iraq.
In a table with data from energy sector intelligence firm Kpler, Iranian exports are seen as plunging to roughly 0.5 mbd in May from around 1.4 mbd in April.
The supply disruptions, including those from crisis-hit Venezuela, come as OPEC and its allies including Russia -- often called OPEC plus -- are pushing forward with their latest pact to restrain production.
After a production glut led to prices dropping last year, they agreed in December to trim production once again.
The IEA said the OPEC plus nations produced 0.44 mbd less than their target in April.
Nevertheless, it said, "there have been clear and, in the IEA’s view, very welcome signals from other producers that they will step in to replace Iran’s barrels, albeit gradually in response to requests from customers".
It noted that despite the supply uncertainty and a brief run up to $75 per barrel, prices for the global benchmark Brent crude are little changed from one month ago.