OPEC's spare capacity has reached 3.3 million barrels per day, according to an International Energy Agency (IEA) statement on the global oil markets released on Tuesday.
"As a result of OPEC's high compliance rate with the agreed supply cuts in the OPEC+ group, global spare production capacity has risen to 3.3 mb/d, with 2.2 mb/d held by Saudi Arabia and around 1 mb/d by the United Arab Emirates, Iraq and Kuwait," the IEA said in its release as oil prices reached new 2019 highs.
The Brent and WTI benchmarks were both trading up on Tuesday following the news that the United States would not extend Iran sanction waivers to purchasers of Iranian crude oil, leaving the original May 1 cutoff date firm.
The global oil markets are now adequately supplied, the IEA said, with plenty of spare capacity to make up for any gaps in oil supplies.
Iran's April oil exports of 1.1 million barrels per day were already lower than in March. With spare capacity of 2.2 million barrels per day in Saudi Arabia, OPEC should theoretically be able to comfortably lift production to compensate for lost Iranian barrels, with Saudi Arabia currently pumping about a million less than in November 2018.
The IEA cautioned, however, that global economic growth is still fragile, and urged oil consumers and producers to "take steps to avoid higher oil prices that will prove painful to all alike."
Global OECD oil inventories, too, are above the five-year average at 2,871 million barrels, according to the IEA. The API is due to release US crude oil inventory figures today at 4:30pm EST-a highly watched metric that traders use to assess the condition of the oil markets.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More