Saudi Arabia says ready to boost oil production, taking aim at Iran

Andrew Cummings
July 4, 2018

Last month President Donald Trump withdrew the United States from the landmark Iran nuclear deal, re-imposing USA sanctions that had been suspended in return for curbs on Tehran's nuclear programme.

In a tweet on Saturday, Trump said the extra Saudi oil would help offset a decline in supply from Iran, after the United States pulled out of the Iran nuclear deal in May and moved to reimpose oil sanctions.

The White House later walked back the president's comments, saying the king said his country can raise oil production if needed. "And yes, we will certainly be requesting that their oil imports go to zero, without question".

So, how much support can Trump garner for his economic assault against Iran?

Oil prices fell on Monday, reversing course from last week as supplies from Saudi Arabia and Russian Federation rose while economic growth stumbled in Asia amid escalating trade disputes with the United States.

Oil is surging as the US pushes allies to end imports of Iranian crude, as global supply disruptions persist and American crude inventories are already at the lowest since January.

After the United States withdrew from the Iranian nuclear deal in May, it said it would reimpose economic sanctions against Tehran by November.

Benchmark Brent crude oil fell $1.24 a barrel to a low of $77.99 before recovering to around $78.50, down 73 cents, by 0935 GMT. That's led to higher prices at gasoline pumps in the it heads toward midterm elections for Congress.

On Fox, Trump directed blame at the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the biggest producer.

But a flurry of U.S. announcements over the weekend unsettled oil markets. "OPEC is and they better stop it because we're protecting those countries, many of those countries". That coalition late last month agreed to an increase of 1 million barrels per day.

Saudi Arabia now produces about 10 million barrels of oil per day. Trump will leave for a trip to Europe later this month for a meeting with North Atlantic Treaty Organisation allies, whom he has criticised sharply for paying too little for their joint defence.

European countries have been attempting to negotiate exemptions for their firms, but the official confirmed that US President Donald Trump intends to stick to his deadline. "We want to work with these countries to build a strong global effort", he said.

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