Saudia Arabia's leader has promised U.S. President Donald Trump that the country will produce more oil if needed and that it has 2 million barrels per day of spare capacity, the White House said on Saturday. "He has agreed", Trump tweeted on June 30.
Saudi Arabia, which has been pumping about 10 million barrels per day, holds the largest spare capacity in the world and is the only country that can add substantial supply to the market. It's telling that this is his third provocation on oil prices since April.
Saudi Arabia's announcement on Tuesday comes just over a week since OPEC and non-OPEC producers including Russian Federation agreed to increase production by 1 million barrels per day from the start of this month.
Kazempour said Trump was trying to intensify tensions between Iran and Saudi Arabia.
Trump's interventions with tweets "unsettle" the market and appear to have pushed prices up, Standard Chartered Plc energy analyst Emily Ashford and head of commodities research Paul Horsnell wrote in a note on Tuesday (July 3).
Recent price rises have also been spurred by a USA announcement that it plans to reintroduce sanctions against Iran from November, targeting oil exports.
Along with OPEC+ curbing output by 1.8 Mbd, Venezuela's crude oil production continues to decline and could soon drop under 1 Mbd, depriving the market-and specifically USA refiners-of a major oil supplier.
Ardebili also noted that Trump is impolite in his rhetoric, and Middle Eastern producers never respond in the USA president's style.
THE Kingdom of Saudi Arabia (KSA) has expressed readiness to pump more oil to maintain market balance and stability.
Over the weekend, the oil market received another jolt on news that force majeure will likely be declared at two additional Libyan export terminals, which has translated into the disruption of more than 850,000 bpd and has pushed the country's output down to a paltry 300,000 bpd.
"The 'OPEC+' agreement fell short of what was expected to render a bearish signal to the market", Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London, said in an email.
Michael Armstrong, regional director for the Middle East, Africa and south Asia (Measa), FCA and Institute of Chartered Accountants in England and Wales (ICAEW), said due to surge in oil price, the UAE economy will bounce back in 2018 with growth accelerate from 1.5 per cent last year to 2.6 per cent this year. In this regard, Trump has asked Saudi Arabia to raise its oil production to help both his future and that of the Republicans.
"A good chunk of the rally that we've had in the last month or so we've had is because of the Iranian sanctions", Smith says. He also called on the United States to join world powers in a meeting with Iran in Vienna on Friday.