Two OPEC members face uncertainty

Article Excerpt

Oil supply from Iran and Venezuela is under threat. A sharp decline for either member of the Organization of the Petroleum Exporting Countries (OPEC) would remove supply from a tightly balanced oil market. The decision by the U.S. to withdraw from the Joint Comprehensive Plan of Action, which regulates Iran’s nuclear activities, has created uncertainty about the country’s oil exports. Iran currently produces an average of 4.5 million barrels of oil per day. When sanctions were imposed in 2012, those exports fell by about 1.2 million barrels. In Venezuela, oil production declines have already started to accelerate as political and economic uncertainty rises. Output has dropped from 2.6 million barrels per day for 2015 to 1.6 million for the first quarter of 2018. Crude oil production will likely fall by another 200,000 barrels per day this year as producers face equipment supply challenges. The potential for deep cuts to both Iran’s and Venezuela’s output could push prices even higher. At…