Abu Dhabi — OPEC producers have enough spare capacity between them to handle any disruption from the loss of Iranian crude oil supplies due to new US sanctions, UAE energy minister Suhail al-Mazrouei said Sunday.
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This was not the first time an OPEC member nation was facing an embargo, and the group had sufficient "buffer" to cope with the lost barrels, Mazrouei told journalists on the sidelines of a downstream investment forum in Abu Dhabi.
Buyers of Iranian oil have until November 4 to wind down their purchases before sanctions kick in, following President Donald Trump withdrawing the US from the Iran nuclear deal last week.
Iran is OPEC's third-largest producer with 3.83 million b/d of output in April, according to the latest S&P Global Platts survey released earlier this month. It exports around 2.5 million b/d of crude oil.
Most analysts surveyed by Platts said that there was likely to be an immediate impact of about 200,000 b/d of Iranian crude being shut-in, rising to perhaps 500,000 b/d after six months as the deadline nears. Some of them put the the disruption to the market closer to 1 million b/d of crude oil.
"That is not what we are concerned about," Mazrouei said. Of more concern for OPEC's current president were declines in other countries. "The decline in Venezuela is very large," he added.
Venezuelan output plunged to 1.41 million b/d in April, down 540,000 b/d from a year ago, according to the Platts survey. That is one of the lowest levels seen in the 30 years since Platts began the monthly surveys.
New US sanctions on Venezuela, which the Trump administration has threatened, could exacerbate the situation.
OPEC, along with 10 non-OPEC allies led by Russia, is in the midst of a 1.8 million b/d supply cut agreement that is scheduled to run through the end of 2018. Mazrouei said last week that OPEC was committed to the production cuts, but would discuss the loss of output at the group's next meeting on June 22 in Vienna.