The International Energy Agency released its statement regarding the recent development on the oil market. IEA said that oil market dynamics have been shaped by many factors, which led to tight market conditions.
Oil market has been shaped by strong growth in demand, compliance by countries party to the Vienna agreement to cut output, and the crisis in Venezuela, leading to tighter overall market conditions. The restoration of sanctions on Iran, which exports 2.5 million barrels of oil a day and is the world’s fifth-largest exporter, may affect the market balance.
On 8 May, US President Trump announced decision to withdraw the US from participation in the JCPOA (Joint Comprehensive Plan of Action) and to re-impose US nuclear-related sanctions, which is expected to have significant implications for shipping trade with Iran and the insurance of this trade.
"The International Energy Agency, whose mandate is to support and safeguard global energy security, is monitoring the situation very closely. As ever, the IEA stands ready to act if necessary to ensure markets remain well supplied."
Recently, the World Bank said that it expects oil prices to average $65 a barrel over 2018, increasing from $53 a barrel in 2017. This will be caused by strong demand from consumers and a simultaneous restraint by oil producers.