Could Saudi Arabia replace all barrels lost from Iran sanctions?

Iranian oil minister calls Trump's order to OPEC insulting

Iran's oil minister has hit back at Trump over production demands

The move by South Korea, one of Iran's main customers in Asia along with China and Japan, comes as it is in talks to seek an exemption from USA curbs on buying Iranian oil, in line with a waiver it received during previous sanctions, Reuters reported.

However, it has not produced more than 10.42 million bpd on an annual basis or 10.63 million bpd in a single month in the last 20 years.

He added that 1.2 million Iranian barrels a day were off the market the last time Iran was sanctioned, but that was possible because USA shale drilling was growing at a rapid pace, demand was lower and Libyan output had come back to the market to make up for some of the Iranian output.

BMI added that it was unclear that there will be a market for the additional barrels, and how sustainable that market would be.

Libya's national oil production fell to 527,000 barrels per day from a high of 1.28 million bpd in February following recent oil port closures, the head of the National Oil Corporation said in a statement on Monday. At the same time, other countries face higher energy prices.

However, it warned that this would leave the global market with less than 1 million bpd of capacity left to meet all other contingencies.

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Iran's Opec governor Hossein Kazempour Ardebili was quoted in June as saying that oil prices could jump to $140 a barrel due to the United States sanctions against the country and Venezuela. So much can change in oil markets in the course of a few weeks.

Saudi Arabia has reported roughly similar production numbers to JODI, with output peaking at 10.72 million bpd in November 2016 (https://tmsnrt.rs/2NwQzpZ).

"Maximum production would require opening the chokes on existing wells and bringing previously shut-in wells back into service", Reuters added.

Domestic crude stocks have already fallen by 95 million barrels since their peak in October 2015, according to government data submitted to the JODI.

OPEC agreed in June on a modest increase in oil production starting in July after its leader, Saudi Arabia, persuaded arch-rival Iran to cooperate, following calls from major consumers to curb rising fuel costs. "So it appears the oil market has little confidence that Saudi can manage to reach and maintain 11mn b/d and raise exports proportionally without continuing to draw down its inventories further".

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