IEA says Venezuela and Iran to test oil market supply But risks remain to global oil demand, including trade war The global oil market faces a crucial test amid questions about how much spare capacity can be tapped to offset falls in exports from Iran and Venezuela, the International Energy Agency (IEA) said. Iranian oil exports have already fallen ahead of US sanctions which come into force in November while production in Venezuela continues to decline. “If Venezuelan and Iranian exports do continue to fall, markets could tighten and oil prices could rise without offsetting production increases from elsewhere,” the Paris-based EA said in its monthly report. It estimates that OPEC producers are currently sitting on some 2.7 million barrels of spare capacity — 60 percent of which is in Saudi Arabia. But it is not clear how much of this global capacity can be brought online quickly as the world emerges from four years of oil price weakness when investment in oil production declined dramatically. Oil prices fell on Thursday after rallying over the week to skirt the $80 per barrel mark. Brent crude slipped about 65 cents to $79.09 in early afternoon trade in London. US light crude dropped by about $1.15 to $69.22. “A bout of profit-taking is pushing the energy complex down after two days of stellar gains,” said Stephen Brennock, an analyst at PVM Oil. Iranian oil exports have fallen ahead of the planned introduction of US sanctions on crude exports from the country that come into effect on Nov 4. Tanker data suggest Iranian crude exports are already off by about 500,000 bpd — some of it floating in tankers in the waters of the Gulf waiting to find ports to unload. While US policy on sanctions against Iran has helped to support the oil price in recent weeks, its trade wars with China and Turkey are competing as a downward drag on the market. “As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the US dollar raising the cost of imported energy. In addition, there is a risk to growth from an escalation of trade disputes,” the IEA said . “We are entering a very crucial period for the oil market. Things are tightening up.”