OPEC Looks To Fill The Oil Gap From Iranian Sanctions As US Energy Surges
The Organization of Petroleum Exporting Countries (OPEC) expanded oil production in August as U.S. sanctions weighed heavily on Iran’s oil production, according to the International Energy Agency (IEA).
The 15-member conglomerate increased oil production by 420,000 barrels a day from July to August, the largest month-to-month jump for OPEC in more than two years. The cartel is pumping out an average of 32.63 million barrels a day — the highest production level in nine months, the IEA’s monthly report stated, according to The Wall Street Journal.
U.S. officials announced in early August that President Donald Trump had reinstated sanctions on Iran after pulling out of the Iranian nuclear deal. The sanctions have crippled Iran’s ability to operate in the world economy by limiting its use of the U.S. dollar and trade with the U.S. (RELATED: Trump Slaps Sanctions on Iran That Obama Lifted)
The U.S. and OPEC have ramped up oil production to fill the gaps in the global market left by Iran under U.S. sanctions. OPEC’s increased production “far outweighed losses from Iran ahead of U.S. sanctions,” according to the IEA.
U.S. oil production has passed Saudi Arabia — the de facto head of OPEC — to make the U.S. the largest oil producer in the world, according to preliminary reports from the U.S. Energy Information Administration (EIA).
“U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades,” the EIA reported Wednesday. “In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999.”