Oil prices dwindled on Monday with Brent crude dropping down to less than $76 (£57), around one per cent down, as a result of Russia increasing production and the US stepping up its drilling activity.
Despite the Organisation of the Petroleum Exporting Countries (Opec) deciding to resupply the market when members nations meet on 22 June in Vienna, it has up until now withheld barrels to push up the oil price which peaked last month at around $80 per barrel.
Russia's oil production has now risen to 11.1m barrels per day, which is a slight increase from its May production of just under 11m barrels, and the US continues to push production which is already at a record high at 10.8m barrels per day.
Ashley Kelty, analyst at Cantor Fitzgerald, told City A.M. that it was only a matter of time until the US would have to slow down production as it does not have the necessary infrastructure or storage to keep up the current output.
However, the market is still feeling the absence of oil from both Iran and Venezuela which both has suffered falls in production as a result of US sanctions, and in the case of Venezuela, an economic crisis.
Opec decided to curb supply of oil to the market in 2017 following a critical drop in price which brought oil down to as low as $30 per barrel and has kept the restriction in place up until now. Now it has, after increased pressure from Trump, decided to increase production by around 1m barrels.
After Trump pulled out of the Iran nuclear deal and reimposed sanctions on Iran, approximately 2m barrels went off the market, leaving a hole reflected in the rising prices.
When the US then appealed to Opec to increase production to fill the gap, Iran's Opec governor Hossein Kazempour Ardebili told Reuters: “It's crazy and astonishing to see instruction from Washington to Saudi to act and replace a shortfall of Iran's export due to their illegal sanction on Iran and Venezuela.”
At the same time, Venezuela was already struggling with keeping up with targets, due to political turmoil and lack of investment, and had last week a backlog of around 24m barrels, a month behind schedule, with a tanker bottleneck situation delaying deliveries.
Oil major Chevron was among the companies waiting for crude deliveries from Venezuela when PDSVA, the state-owned Venezuelan oil company, announced that it may declare force majeure, meaning it would be temporarily unable to fulfil contracts.