Global oil output hit a record of 100 million barrels per day in August, but the market may tighten and prices rise as exports from Iran and Venezuela decline, the International Energy Agency (IEA) said on Thursday.
"We are entering a very crucial period for the oil market," the IEA said in its latest monthly report. "Things are tightening up."
The global record came as output from Opec rose to a nine-month high of over 32 million barrels per day (mb/d).
The group had agreed in Vienna in June to push up production in order to put a cap on soaring prices.
In recent months, prices have wavered comfortably between the $70 and $80 per barrel on the Brent crude futures contract.
According to the IEA, a rebound in Libyan production, near-record Iraqi output and higher supply from Nigeria and Opec kingpin Saudi Arabia have so far managed to offset the impact of shrinking production from crisis-hit Venezuela and Iran.
But with the crisis in Venezuela showing no sign of abating, and with new US sanctions on Iran's oil industry set to come into force on November 4, other producers may have to ramp up production even further if they want to limit the impact on the market.
"It remains to be seen if other producers decide to increase their production. The price range for Brent of $70 to $80 per barrel in place since April could be tested," the IEA said.
In May, US President Donald Trump pulled the US out of the 2015 nuclear deal with Iran and said other countries must stop buying oil from Tehran or face American sanctions.
And hundreds of thousands of Venezuelans have fled their country since the nation became engulfed in a political crisis that has sent the economy into free fall.
"The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to November 4 will reveal more decisions taken by countries and companies with respect to Iranian oil purchases," the IEA said.
Output from Opec member Iran in August hit its lowest level since July 2016, the IEA said, "as more buyers distanced themselves from Tehran ahead of looming US sanctions", the report said.
Top buyers China and India have already cut back purchases from Tehran, and other countries are likely to do the same between now and November.
"While Iranian exports have fallen by nearly 500,000 barrels per day since May, shipments from Iraq and Saudi Arabia have risen by 200,000 barrels per day and 60,000 barrels per day respectively," the IEA added.
In Venezuela, too, production dipped in August to 1.24 million barrels a day, and should it continue to decline, may hit 1 million barrels a day at the end of 2018.
Opec, of which Venezuela is a member, had already warned that the country's output was at a three-decade low.
"If Venezuelan and Iranian exports do continue to fall, markets could tighten and oil prices could rise without offsetting production increases from elsewhere," the IEA cautioned.