The International Energy Agency said pressures on the global oil market are increasing after world production fell by 200,000 barrels a day last month, with political unrest and tensions with Iran complicating what could become a “bumpy ride in the months ahead.”
Already, concerns about a tight world oil market have pushed prices 20 percent higher since December, the agency said in a report released Wednesday.
Higher world oil prices have been the driving force behind surging fees at gas pumps in Houston and across the United States.
The decline in world oil supply, a result of production interruptions in South Sudan, Yemen, Syria, Canada and the North Sea, came even as Saudi Arabia ratcheted up production to its highest level in nearly three decades, according to the report.
Saudi Arabia’s increased oil output of 315,000 barrels a day could not make up of a decline of about 500,000 barrels a day from other countries, according to the agency.
The move also reduced the Organization of Petroleum Exporting Countries’ ability to further increase production in the case of a serious market disruption, cutting its spare capacity from 2.85 million barrels a day to 2.75 million barrels a day.
Iran, which is facing new oil sanctions from the European Union and United States, accounted for 3.38 million barrels of oil a day in February, according to the agency.
Although India and South Korea purchased more Iranian oil in January, the country’s overall oil exports are expected to dramatically decline by the summer.
“Almost all of the country’s current lifters will inevitably scale back volumes in order to avoid falling foul of U.S. sanctions,” the agency said.
Brent crude, the benchmark for international oil prices, was trading above $126 Wednesday. Western Texas Intermediate, a standard for domestic crude, was trading above $106.