Report warns of stretched oil supplies

RISING global oil supply, driven by crude giants Saudi Arabia and Russia, may come under pressure as key producers face disruptions, the International Energy Agency said yesterday.

The IEA welcomed in its July report last month’s agreement between the Organization of the Petroleum Exporting Countries and Russia to open the taps in order to bring prices down from multi-year highs.

But it pointed to supply disruptions in Libya after a string of attacks on infrastructure.

It also highlighted continuing unrest in Venezuela and a drop in Iranian exports after US President Donald Trump announced he was pulling the US out of the landmark nuclear deal reached in 2015.

“The large number of disruptions reminds us of the pressure on global oil supply,” the IEA said. “This will become an even bigger issue as rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit.”

The IEA report was published a day after both main oil contracts were sent into freefall by worries over a stronger dollar and the impact of the global trade war on demand.

The selling was also fanned by Libya’s resumption Wednesday of oil exports from its eastern production heartland after a showdown between the war-torn country’s rival authorities.

“At the time of writing, the situation seemed to be improving, but we cannot know if stability will return,” it said.