Crude supply disruptions on geopolitical grounds have reached a stunning 5.3 million b/d, according to our assessments (see Market Watch – Issue 7).

  • Although a bit overlooked due to the focus on discussions surrounding OPEC+ market management, we must not forget other sizeable amounts of production currently locked away temporarily due to geopolitical issues. Including the OPEC+ cuts, we see some 5.3 million b/d of unused crude and condensate supply potential.
  • It is also important to note that this figure represents a realistic potential, which could be achievable within a couple of months, and not simply a theoretical maximum capacity. Besides the deliberate OPEC+ cutback, the largest contributors to this are undoubtedly Iran and Venezuela.
  • The civil wars in Syria and Yemen are still ongoing, with no solution in sight. In the case of the Neutral Zone, it remains unclear whether production will be ramped up in the event of an agreement between Saudi Arabia and Kuwait, as the barrels would fall under OPEC targets.