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World's Spare Oil Capacity Grows as Iran Sanctions Bite

The world’s spare oil production capacity outside of Iran rose in the last two months as gasoline demand waned in the United States and oil use for power generation fell in the Middle East, the U.S. government said in a bimonthly report, Reuters reported Thursday, October 25. In September and October, spare oil production capacity was 2 million barrels per day, up from 1.8 million bpd in the previous two months, said the report from the U.S. Energy Information Administration (EIA), which is required by last year’s Iran sanctions law. The slightly larger cushion gives room for the Obama administration to continue pressuring Tehran over its disputed nuclear program through sanctions that target Iran’s oil revenues. The sanctions require global importers to buy less Iranian crude or risk being cut off from the U.S. financial system.