Saudi Arabia has never produced more than 10.6 million barrels per day (mbd) on average over a single month, Bank of America Merrill Lynch (BofAML) said in a new report on Sunday.

 

The highest annual average production recorded by the Kingdom was 10.4 mbd in 2016 since 1970, it added. In May, oil output rose by 161,400 barrels per day to 10.03 mpd.

 

"Even in the recent period, we have observed a steep decline in domestic Saudi oil inventories. Thus, it appears the oil market has little confidence that Iran volumes can be easily replaced," the bank noted.

 

Meanwhile, BofAML estimates oil prices may rise by $50 per barrel if Saudi caps out as Iran exports drop to zero following US sanctions.

 

Iran represents about 5 percent (5 mpd) of global oil supplies.

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