Will Saudi Arabia boost oil production?


U.S. officials are pressing allies in Europe, Asia and the Middle East, including Saudi Arabia, to adhere to the sanctions, which are aimed at pressuring Iran to negotiate a new agreement to halt its peaceful nuclear programmes. "This leaves the world in kind of a vulnerable state". The destruction of two more storage tanks will probably have a long-term effect on exports.

Late last week, Iran's Oil Minister Bijan Zangeneh urged the Organization of Petroleum Exporting Countries (OPEC) to prevent some of its members from increasing output without arriving at a consensus. He also noted it always takes at least two months before a change in shipping commitments affects the market.

USA crude futures were also down 25 cents at $73.89, not far from Tuesday's 3-1/2-year high above $75.

A little more than an hour after Trump's tweet, the state-run Saudi Press Agency reported on the call, but offered few details.

Trump's comments came Saturday as global financial markets were closed.

"They seek to push Iranian exports of crude, condensate, and oil products to zero", energy consultancy FGE said in a note. In May, the level reached 150%, that is, the deal participants cut production by 2.8 mln barrels per day instead of 1.8 mln barrels, as stipulated in the agreement.

Saudi Arabia has expressed readiness to use spare production capacity to maintain market balance.

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"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.

Last week, members of the OPEC cartel led by Saudi Arabia, and non-cartel members, agreed to pump one million barrels more crude oil per day, a move that should help contain the recent rise in global energy prices.

Iranian OPEC Governor Hossein Kazempour Ardebili claimed Thursday Trump's tweets are putting upward pressure on prices. But broadcasting its requests on Twitter with a number that stretches credibility opens a new chapter in U.S. -Saudi relations, Halff said. He said, "The target of the U.S. is firstly [to cut down Iran's] oil [sales]. I think the difficulty for them is to distinguish what is a real ask from what is public posturing".

A second set of sanctions will snap back on November 6.

Iranian President Hassan Rouhani is traveling to Switzerland and Austria this week on a diplomatic tour of his own to try to preserve the Iran nuclear deal after the US withdrawal. Turkey stood at 9 percent and Italy at 7 percent.

USA officials from the Treasury Department and State Department have been taking what Hook referred to as travelling "road shows" to explain the policy to their counterparts around the world over the past few weeks, ahead of August 4, when the first sanctions will be reimposed on automotive, gold, and key metals.