Fuel Supply-Demand Deficit Widens Without Iran, EIA SaysMoming Zhou and Mark Shenk
Excluding Iran from the global oil market increased the shortfall between worldwide supply and demand, the U.S. Energy Information Administration said.
Global petroleum use averaged 2.2 million barrels a day more than output in July and August when Iran is excluded from the calculations, the EIA, the Energy Department’s statistical arm, said in a report today. Iran can help reduce the deficit by 1.5 million barrels a day as the country’s production outpaced demand, the EIA said.
The examination of oil and fuel supplies and prices outside of Iran came as the U.S., the U.K. and other Western countries debate a military strike against Syria, an ally of Iran, after Syria’s government allegedly used chemical weapons against civilians. Iran is facing European Union sanctions against its oil exports aimed at stopping the country’s nuclear programs.
Global petroleum production excluding Iran averaged 85 million barrels a day in July and August and consumption averaged 87.2 million, the EIA said. Iran produced 3.4 million barrels a day of fuels and used 1.9 million.
Iran produced 2.57 million barrels a day of crude in August, up 10,000 barrels from the previous month, a Bloomberg survey showed. Output was down 180,000 barrels from a year earlier. Iran, which was OPEC’s second-biggest producer as recently as June 2012, is now in sixth place.
The Middle East accounted for 35 percent of global oil production in the first quarter of this year, International Energy Agency data showed.
The EU sanctions enacted on July 1, 2012, ban the purchase, transport, financing and insurance of Iranian oil. Iran has said that its nuclear program is for civilian energy and medical research. The U.S., other United Nations Security Council members and the EU suspect a covert atomic weapons program.
The prospect of an imminent attack on Syria has faded as U.K. Prime Minister David Cameron, the U.S.’s top ally, struggled to win parliamentary backing for military strikes that critics said echoed the push to war in Iraq.
The Obama administration is also laboring to marshal conclusive evidence backing its assertion that Syrian President Bashar al-Assad was directly responsible for the attack, said three intelligence officials familiar with the situation.
Iran has warned that an attack on Syria would drag the whole region into the conflict. Syria borders Iraq and is near Iran, countries that together hold almost a fifth of the output capacity from the Organization of Petroleum Exporting Countries, according to Bloomberg estimates.
West Texas Intermediate crude for October delivery declined $1.30 to settle at $108.80 a barrel on the New York Mercantile Exchange. Brent for October settlement dropped $1.45, or 1.2 percent, to $115.16 a barrel on the London-based ICE Futures Europe exchange.