It may take longer than expected to balance the world oil markets, with the outlook “only getting murkier”.
That’s on the back of the potential approach of a final Iranian nuclear deal and a sharp hike in output in the Middle East, according to the International Energy Agency (IEA).
In its Oil Market Report for April, the IEA stated: “The outlook is only getting murkier. That’s in part because the backdrop against which the adjustment is playing out is constantly changing.
“One of the many questions hanging over the market today is, how quickly could Iran be expected to ramp up output and exports if the agreement were to be made permanent?”
According to the report, global supply rose by an estimated one million barrels per day (mb/d) in March to 95.2 mb/d as OPEC production recorded its highest monthly increase in nearly four years.
OPEC crude oil output also soared to 31.02 mb/d as a result of “sharply higher” supplies from Saudi Arabia, Iraq and Libya.
The IEA has raised its forecast for global oil demand growth in 2015 to 93.6 mb/d, citing strong consumption in Europe, India and the United States.