While geopolitics and industry disruptions are clouding the global crude oil market outlook, the market balance is set to flip from surplus into deficit, AFP reported citing the International Energy Agency’s (IEA) latest monthly oil market report on Wednesday.
The Paris-based IEA said this is a development that would favor efforts by oil producing nations to keep prices high.
It said the world's oil supply fell last month, amid rising global tensions as US sanctions on Iran tightened and OPEC+ members produced less crude in line with their pact.
IEA also revised down its 2018 oil demand growth estimate by 70 thousand barrels per day (bpd) to 1.2 million barrels per day (mbd) and its 2019 forecast is reduced by 90 thousand bpd to 1.3 mbd.
The IEA said Iranian crude oil output fell in April to 2.6 mbd, the lowest level in over five years, and could tumble in May to levels not seen since the 1980s war with Iraq, AFP report added.
The IEA said the OPEC+ nations produced 0.44 mbd less than their target in April.
Nevertheless, it said: "there have been clear and, in the IEA's view, very welcome signals from other producers that they will step in to replace Iran's barrels, albeit gradually in response to requests from customers."
It noted that despite the supply uncertainty and a brief run up to $75 per barrel, prices for the global benchmark Brent crude are little changed from one month ago, AFP reported.
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