Crude supplies from OPEC at highest level since Oct 2008 - IEA

14 March 2012 09:44  [Source: ICIS news]

SINGAPORE (ICIS)--Crude oil supply from OPEC (Organization of Petroleum Exporting Countries) in February rose to its highest level since October 2008, amid ongoing concerns over Iranian crude supplies, boosted by higher output in Saudi Arabia and a sharp production recovery in Libya, the International Energy Agency (IEA) said on Wednesday.

Output from OPEC in February rose by 315,000 bbl/day month on month to 31.4m bbl/day, the IEA said in its monthly report.

Crude oil supplies from Saudi Arabia rose by 150,000 bbl/day month on month to a 30-year peak of 10m bbl/day in February, while Libyan production in February was up by 150,000 bbl/day to 1.3m bbl/day, it said.

Output in Libya is currently about 300,000 bbl/day below its pre-war levels of 1.6m bbl/day, according to the IEA.

“Market attention has been evenly focused on the potential disruption in Iranian crude flows in coming months as the EU’s 1 July oil embargo nears and the very real loss of supplies from non-OPEC producers Syria, South Sudan, Sudan and Yemen,” the agency said.

Crude production in Iran, a member of OPEC, fell by 50,000 bbl/day to 3.4m bbl/day in February, according to the IEA.

“Already, sanctions of the country’s central bank are having a pronounced impact on Iranian crude trade patterns,” it said.

“While a number of European countries have reportedly already halted imports of Iranian crude, latest shipping data show other buyers such as India and South Korea sharply increased purchases in January,” the IEA said.

China has also cut its crude imports from Iran by half, from 550,000 bbl/day in December last year to 275,000 bbl/day in January, in the wake of a dispute over price terms.

“Going forward, a number of European buyers have expressed concern that they will have difficulty finding replacement barrels of similar quality to Iran’s heavier crudes,” the IEA said.

Exports of crude from Iran could be cut by around 800,000 bbl/day to 1m bbl/day from the middle of this year in the wake of the embargo by the EU, it said.

“Almost all of the country’s current lifters will inevitably scale back volumes in order to avoid falling foul of US sanctions,” the agency said.

“The most immediate impact so far has been on the shipping industry, which has seen EU insurance companies announce suspension of coverage for tankers that call at Iranian ports,” it added.

Meanwhile, non-OPEC oil production is forecasted to have fallen by 500,000 bbl/day to 52.8m bbl/day in February on the back of weather and mechanical-related field outages in the North Sea and Canada, according to the IEA.

Continued unrest and additional sanctions in Syria, pipeline sabotage and labour strikes in Colombia and Yemen, and the transit dispute between Sudan and South Sudan also contributed to the decline in non-OPEC oil output, it said.

On the demand front, the IEA has kept its 2012 global oil demand forecast unchanged from its previous estimate at 89.9m bbl/day.

The daily oil demand in 2011 was 89.1m bbl/day, according to the agency.

“The world is likely to see a relatively modest expansion in oil product consumption in 2012, as a subdued economic backdrop coincides with relatively high oil prices,” the IEA added.

By: Nurluqman Suratman

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