The growing USA pressure on the world to totally stop buying Iranian oil has produced a warning from top Iranian officials that the world economy, and America's economy in particular, would pay a severe price from such a ban.
Volatility in the Middle East and US foreign policy can have a major impact on oil prices. However, Venezuela is expected to continue to be a problem, and unless the USA softens its tone toward Iran, it will continue to contribute to the overall bullishness in the market.
Oil prices fell earlier today as Trump demanded that the OPEC cartel reduce crude prices.
President Donald Trump used Twitter on Wednesday (July 4) to express his frustration with high U.S. It has made similar threats in the past, prior to the 2015 nuclear deal.More news: Woman Climbs Statue of Liberty to Protest Family Separations, Island Shut Down
"This is business, Mr. President - we thought you knew it", he added. By withdrawing from the deal, America reimposes economic sanctions on Iran, impacting Tehran's ability to sell its oil on the market.
Although Saudi Arabia and Russian Federation have said they would raise output to make up for disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.
Norway-based Rystad Energy expects Iranian production to drop by 700,000 bpd by December 2018.
Stocks of gasoline and middle distillates such as heating oil and diesel fuel also drew, the survey showed.More news: Alleged sexual abuse victim sends emails to Ohio Rep
Vijay Valecha, chief market analyst at Century Financial Brokers, said the UAE's crude oil production peaked in October 2016 at 3.13 million bpd and has declined since then in line with the Opec production cuts. In North Africa, OPEC members include Algeria and Libya.
Venezuelan production fell to 1.36 million bpd by June, compared to just under 2.5 million bpd at the start of past year, amid a structural underinvestment in the country.
Both leaders also discussed "efforts by the oil-producing countries to compensate for any potential shortage in supplies", SPA reported.
Last month, members of OPEC agreed to pump an additional 1 million barrels of crude daily, a move that should help contain prices.More news: Elizabeth Warren Responds To Trump's Million Dollar Offer To Take 'DNA Test'
Top Photo | Workers at an oil facility near Riyadh, Saudi Arabia. "If production increases as we now forecast, a large share of this would be eroded, leaving the global oil market with a limited "margin of safety", said Morgan Stanley's Rat.