More output by members of OPEC the Organization of Petroleum Countries was able to offset the seasonal declines by non-OPEC members, though supply from non-OPEC nations was up as well by 2.6 million barrels per day, led by the United States.
The latest forecast by IEA is that production by non-OPEC members will grow by over 2 million barrels daily during 2018 and by 1.8 million bpd during 2019, due to the non-stop growth in record output by the U.S.
At the same time, August saw the crude supply for OPEC hit a high of nine months of 32.62 million barrels per day despite worries over dropping production and slashed access from big producers Iran and Venezuela. Higher volumes by Saudi Arabia and Nigeria and an increase in production in Iraq and Libya helped to outweigh the drops.
The cartel of 15 nations agreed to begin raising its output starting in July of 2018 to help stabilize worldwide markets and to offset the losses from suppliers like Iran and Venezuela, which are the third and sixth largest crude producers respectively.
Tehran faces the loss of the majority of its export markets for energy as Washington prepares to place sanctions on its sale of oil beginning November 4 after it pulled out of the nuclear deal with Iran last May. In August the production by Iran dropped by 150,000 barrels per day to a total of 3.62 million, marking its lowest level in over two years, as buyers stopped ordering due to impending penalties by the U.S.
The deal with Iran that six world powers signed offered Iran relief from sanctions in exchange for limiting its nuclear program. The new sanctions Washington has imposed on other parts of the Iran economy during August have already prompted the rial, its official currency, to go into a freefall.
The extended economic crisis in Venezuela has caused a collapse in production of 1 million barrels per day over the last two years, and supply in the South American country is expected to continue deteriorating quickly.
Outlook for growth in global oil demand for this year and 2019 remains the same, IAE said, at 1.4 million barrels per day for 2018 and increasing to 1.5 million per day in 2019.