Crude Oil Supply Falls to Lowest Levels in May Over US Sanctions on Iran

OPEC's crude oil supply is set to fall to its lowest levels in several years after Trump imposed fresh sanctions on Iran.

Written by: Arslan Butt • Friday, May 31, 2019 • 1 min read

• Last updated: Friday, May 31, 2019

OPEC’s crude oil supply is set to fall to its lowest levels in several years after Trump imposed fresh sanctions on Iran. According to a Reuters survey, OPEC’s output increased to 30.17 million bpd in May, but it was still 60,000 bpd less than its output in April.

US imposed fresh sanctions on Iran in November 2018 and announced an end of sanction waivers from May 1, preventing any country from buying Iranian crude. Previously, Iran used to account for oil supply up to 400,000 bpd – the biggest driver in drop in supply in May. US sanctions on Venezuela have also led to a supply drop of 50,000 bpd in May.

Even though Trump has pressured Saudi Arabia to pump more oil to offset the loss of Iranian crude supply in markets, the kingdom continues to voluntarily pump less oil that what OPEC had agreed to do earlier in 2019.

However, even a tightening of oil supply is unable to keep crude oil prices from falling because of the ongoing trade tensions between US and China. Investors are concerned about how the trade war could slow down economic growth worldwide, causing a fall in demand for crude oil.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.