OPEC powerless to prevent prices surging to $100 a barrel

Ali Mohammadi/Bloomberg via Getty Images

A support vessel flying an Iranian national flag sails alongside the oil tanker ‘Devon’ as it prepares to transport crude oil to export markets in Bandar Abbas, Iran, on Friday, March 23, 2018.

“Against this backdrop of dwindling Iranian oil supplies, the focus will turn to meek levels of global, or more accurately, Saudi spare capacity,” Brennock said.

OPEC and non-OPEC producers were initially thought to be reluctant to immediately respond to heightened pressure from the Trump administration, but Saudi Arabia is now expected to put as much as 550,000 additional barrels per day (bpd) onto the market over the next couple of months.

The kingdom has previously claimed to have around 1.5 million bpd available to add to the market if required.

But, Riyadh is thought to be unable to fully offset global supply disruptions over the coming months. And “this essentially leaves the world’s only swing producer powerless to prevent a supply shock and subsequent price spike in the final quarter of this year,” Brennock said.