March 1 (Bloomberg) --
March 1 (Bloomberg) -- Excluding Iran from the global oil market would increase the shortfall between worldwide supply and demand sixfold, based on February production and consumption estimates, the U.S. Energy Department said.
Global fuel use averaged 3 million barrels a day more than output when Iran is excluded from the calculations and 500,000 more when Iran is included, the department’s Energy Information Administration said in a report yesterday.
The examination of oil and fuel supplies and prices with and without Iran was prepared to help guide President Barack Obama’s administration in determining the feasibility of imposing sanctions related to Iranian oil trades through its central bank. Yesterday’s report was the first assessment issued under a Dec. 31 law that requires the EIA to provide an update on oil market conditions every 60 days.
“The EIA report highlights how tight the global market is,” Trevor Houser, an energy analyst and partner at Rhodium Group, a New York-based economic research firm, said in an interview.
“With oil inventories and spare OPEC production capacity running low, consumers don’t have much buffer against additional disruptions in supply.
OPEC spare oil production capacity dropped 33 percent in the first two months of this year compared with same period in 2011, the report showed. The 12 members of the Organization of Petroleum Exporting Countries had an average 2.5 million barrels a day spare capacity during January and February, down from 3.7 million a year earlier.