OPEC oil output fell further from its highest in four years in July as U.S. and European sanctions cut supply from Iran to the lowest in more than two decades. A Reuter’s survey monitored by Nigeria Energy Intelligence showed that supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.18 million barrels per day in July, down from 31.63 million bpd in June.
Oil prices declined below $100 (U.S.) a barrel in June, a level favored by Saudi Arabia and other OPEC members, prompting speculation they might trim supply to prop up prices. There is little evidence to suggest this has happened in July, although the drop in output is larger than some expected to see. OPEC’s production has declined for three months since it pumped 31.75 million bpd in April, the highest since September 2008. The biggest drop this month came from Iran, whose crude is subject to a European Union embargo that started on July 1. The embargo also bars EU insurance firms from covering Iran’s exports, hindering imports by some non-EU buyers.
The U.S. and European sanctions have pushed Iran from its position as OPEC’s second-largest producer to rank third behind Iraq, which this year is benefiting from a long-awaited expansion in export capacity.