The three largest oil producers in the world, Saudi Arabia, Russia and the US are all producing just under 11 million barrels per day, which is over 30% of global demand. Saudi Arabia is close to its all-time record of 10.72 million bpd as its production increased by over 700,000 barrels since May. Russian output also increased over that period and now stands at 10.97 million bpd. As for the US, it is producing about 10.9 barrels per day. The US has seen a very large increase in oil production the last two years. The increase is over 30% for the country.
On the other end of the spectrum, there is an uncertainty as to how the rest of the market will behave. With the ongoing trade war among the major economies, the growth is likely to be stalled in many areas. Weaker economies, in turn, lead to lower demand. “Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy. Medium-intensity conflict would likely reduce global economic growth by at least 0.5 percent, before accounting for tighter financial conditions and sentiment shocks,” – commented a representative from JPMorgan. There is also pressure from the US for European companies to stop dealing with Iran. The policy is aimed at cutting the exports of Iran and curbing the oil production.