A reintroduction of sanctions without seeing other Opec members increase production could remove an estimated 300-500,000 barrels/day of Iranian barrels. Refinery inputs averaged about 16.6 million bbl/d, a decrease of 60,000 bbl/d over the last week.
Oil prices edged up on Friday, extending the previous session's modest gains as looming geopolitical risks from possible new USA sanctions against Iran supported the market. Not coincidentally, oil production from the "OPEC 14" is down by approximately 750,000 barrels per day over this period.
The rise in price of oil goes in parallel to an appreciation of dollar, which is changed to its highest level since December a year ago compared to basket of large worldwide currencies.
Investors are concerned that sanctions against Iran could cut oil supplies.
The story of oil production in Angola, the second largest oil producer in West Africa, is getting less attention from the worldwide oil community.
Angolan crude oil is facing a hard time in Asia. Not surprisingly, this resulted in a rebound in USA gasoline demand and a material improvement in once-high inventory levels. Other crude that is linked to Dubai or WTI is becoming less expensive. The South American country's exports of crude oil have now fallen below comparable figures for Colombia for the first time in history. The figures are the highest since March 2015.
Part of this is due to the deteriorating supply situation in countries like Angola and Venezuela, which is becoming worrying. We are not just talking about a return to strained relations between the USA and Iran if Trump pulls out of the deal, but we also need to look at the risk of what impact this could have on regional markets within the Middle East. Without oil, big agricultural producers would not be able to produce the food we eat in large scale. According to the US Department of Energy, Venezuela is the third-largest supplier of imported crude oil and petroleum products to the United States, though USA imports from Venezuela have been on an overall decline in recent years. Venezuela sends a large share of its oil exports to the United States because of the proximity and the operation of sophisticated U.S. Gulf Coast refineries specifically created to handle heavy Venezuelan crude. In contemplating its policy response to a high oil price scenario, the government should draw upon the lessons of the past. Striking a balance between these two price ranges is not going to be an easy task. "Saudi Arabia who would like to see oil back at $80 per barrel is unlikely to step in with extra barrels unless the spike extends beyond that level".