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When oil traders list the rising risks to global oil supplies, which have helped boost prices close to the highest level in four years, a host of country names usually proliferate from Iran to Venezuela, via hotspots such as Libya and Nigeria.
But on Tuesday another country was added to the list: Norway — boring, stable, predictable Norway — as a small strike by oil workers on platforms in the North Sea helped boost prices back to within touching distance of $80 a barrel.
While the Norway strike itself is not suspected to deliver a significant long-term hit to global supplies, it has nevertheless served to shine a spotlight on just how nervous the oil market has become about even small outages.
Falling output from Venezuela and Libya and the threat of renewed US sanctions on Iran’s oil exports has already significantly tightened the oil market, helping bring a near four-year glut to an end and forcing Opec’s most powerful members and allies to start raising output.
Donald Trump, US president, has called repeatedly on the group, whose most powerful member is US ally Saudi Arabia, to raise production to bring down prices.
But there are increasing fears in the market that the scale of output disruptions and threats in the world will make it difficult to lower prices significantly. Moves by Saudi Arabia and others to increase production also risk cutting into the thin buffer of spare capacity should further outages occur.
“The production impact [from Norway] is, for now, expected to be small,” said Olivier Jakob at Petromatrix. “But this will need monitoring as any supply disruption headline in the world now comes with the added comment of no more spare capacity available.”
Royal Dutch Shell was forced to shut the Knarr field in the North Sea because of the strike, which follows the rejection of a proposed wage deal, but Norway’s state oil company Equinor said output was unaffected.
Brent crude oil rose to a high of $79.51 a barrel, before easing.
Saudi Arabia is expected to raise oil output by close to 1m barrels a day over the summer to a record near 11m b/d in a bid to cap prices, with Russia and other countries adding additional barrels.
Venezuelan output has fallen almost 700,000 b/d in the past year, while about 850,000 b/d of Libyan output is shut-in or at risk.
Iran’s exports of more than 2m b/d will be hit by US sanctions from November. Strikes in Gabon and an outage at a key crude plant in Canada have also tightened supplies.
On Tuesday, Michael Pompeo, US secretary of state, indicated, however, that the US would consider requests for limited waivers from some buyers of Iran’s crude.
“[The] supply cushion is wearing very thin,” said analysts at PVM.