Oil markets need to brace for high levels of volatility in the coming months amid looming supply risks and uncertainty around available spare production capacity. 

The Organization of the Petroleum Exporting Countries (OPEC) and its producer allies set aside political differences and agreed on June 22 to an oil output increase of around 1 million b/d, but question marks remain around how much real volume will hit the market given that several countries are pumping at full capacity and some cannot raise production even if they want to. 

The supply side risks, meanwhile, have intensified. Political turmoil in Libya has severely disrupted production there, the United States has announced that it intends to fully eliminate Iranian oil exports from the market starting November and Venezuelan production is in freefall — the International Energy Age...

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