Oil production from Middle East climbed to record while US output slams: IEA

Oil production from the Middle East has climbed to a record while US output slumps, the International Energy Agency said, in a sign that Opec’s strategy of defending market share is succeeding.

Middle Eastern output exceeded 31 million barrels a day for a third month in June amid near-record supply from Saudi Arabia, while US oil production slid 140,000 barrels a day to 12.45 million. The IEA said that while the re-balancing of global oil markets is progressing, record-high inventories remain “a threat to the recent stability of oil prices.”

“When US shale production was moving upwards very fast it became fashionable to talk of lower reliance on traditional suppliers,” the IEA said. The Middle East’s resurgence is “an eloquent reminder that even when US shale production does resume its growth, older producers will remain essential for oil markets.”

Oil has recovered more than 70% from the 12-year low reached in January as Saudi Arabia’s strategy to pressure Opec’s rivals succeeds in reversing the US shale oil boom.