Oil supply drops as Iran sanctions bite: IEA

PARIS (AFP) – The world’s oil supply fell last month, the International Energy Agency (IEA) said yesterday, amid rising global tensions as United States (US) sanctions on Iran tightened and OPEC+ members produced less crude in line with their pact.

In its latest monthly report on the global oil market, the Paris-based IEA said that while geopolitics and industry disruptions were clouding the outlook it believes that the market balance is set to flip from surplus into deficit, a development that would favour efforts by oil producing nations to keep prices high.

Tensions have been mounting in recent days after the mysterious sabotage of several tankers in the Gulf and drone attacks claimed by Iran-aligned Yemen rebels shut down one of Saudi Arabia’s major oil pipelines.

Saudi Energy Minister Khalid al-Falih called the pipeline attacks, which did not halt exports despite the temporary shutdown of the pipeline, an “act of terrorism… that not only targets the kingdom but also the security of oil supplies to the world and the global economy”.

Meanwhile, the UAE has said four ships were damaged on Sunday in “sabotage attacks” off the emirate of Fujairah, on the mouth of the Hormuz, a key transit point for oil tankers.

The incidents follow the expiration at the beginning of May of waivers the US granted eight major importers of Iranian oil.

The IEA said Iranian crude oil output fell in April to 2.6 million barrels per day (mbd), the lowest level in over five years, and could tumble in May to levels not seen since the 1980s war with Iraq.