This morning, reports disclosed that some of the largest oil producers in the world are mulling the possibility of increasing the oil supply by as much as 500,000 barrels per day (bpd). This comes as an attempt to compensate for the declining output of Iran, it has been reported.
A source informed Reuters that countries that are members of the Organisation of the Petroleum Exporting Countries (Opec), as well as some other producers, are considering the possibility of bolstering oil supply,
Benchmark Brent oil prices declined by more than $1 on the release of the news, dropping to below $79 per barrel after reaching highs of $80 earlier in September.
The said discussions come in the wake of hardening sanctions imposed by the United States of America on Iran, the third largest producer of the Opec, which has been aimed at clamping down on any party that is involved in trading crude with Tehran.
Donald Trump, the President of the US, has also stepped up his calls for Opec to lower the prices.
In a tweet that he posted earlier this week, he stated: “We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The Opec monopoly must get prices down now!”
The sanctions imposed by the White House are likely to have a dramatic effect on the oil market of the world, with Iran having exported approximately 2.5 million bpd of crude and condensate in 2018 which is equivalent to around 2.5 percent of the global consumption.
The decision of President Trump to scrap the nuclear deal between the United States and Iran is also likely to provoke many businesses to step back from their investments in the country.
Earlier this summer, firms including Air France and British Airways announced that they will stop flying to Iran, as both the airlines warned that the said route was no longer considered to be “commercially viable.”