Stalled talks by top oil producers over releasing more supply could deteriorate into a price war, the International Energy Agency (IEA) has predicted.
This comes at a time when vaccines against the Coronavirus are fueling a rise in crude demand.
“The possibility of a market share battle, even if remote, is hanging over markets, as is the potential for high fuel prices to stoke inflation and damage a fragile economic recovery,” IEA said.
International Energy Agency
In its monthly report, the agency stated that OPEC crude oil production for June rose 450,000 barrels per day, from May to 25.93 million barrels per day, as Saudi Arabia led the return of crude to the market.
Saudi Arabia pumped 8.92 million barrels per day, an increase of 380,000 barrels per day from the previous month. The kingdom continued to ease its voluntary cuts.
Riyadh may also raise July production by 580,000 barrels per day in accordance with the OPEC+ agreement and as it gradually phases out its remaining voluntary restrictions.
Kuwait’s production of crude jumped to 2.38 million barrels per day, and the UAE’s production rose by 40,000 barrels per day to 2.68 million barrels per day, slightly less than the higher OPEC+ target.
Iraq was the only producer in the Middle East that reduced production, as it pumped 3.9 million barrels per day, a decrease of 40,000 barrels per day from May, and 50,000 barrels per day less than the ceiling set by OPEC+.
In addition, supplies from Iran, which is exempted from the quotas, increased by 50,000 barrels per day to 2.45 million barrels per day.
In Africa, Nigeria’s production fell by 30,000 barrels per day to 1.31 million barrels per day, with operational problems, sabotage and leakage in pipelines keeping production below its quota.
The Angolan supply also decreased to 1.08 million barrels per day, which is 220,000 barrels per day less than the target volume.
The Libyan production rose to 1.17 million barrels per day, the rate of OPEC commitment to quotas reached 123% during the month.