President Trump said on Saturday that King Salman of Saudi Arabia has agreed to up its oil production by as much as "2,000,000 barrels" to help bring down prices after instability in Iran and Venezuela.
U.S. President Donald Trump has faulted the rising global oil prices, calling on Saudi Arabia to jerk up production to crash the high prices.
Saudi Arabia was producing around 10 million barrels of crude a day in May, according to OPEC. A request by Trump for 2m bpd more would be at least double market expectations.
Saudi Arabia has a maximum sustainable capacity of 12m bpd, but it has never tested that level of production.
Saudi Arabia plans to pump up to 11 million bpd in July, and Russian Federation has said it could increase output by more than 200,000 bpd.
June 29, 2018 (Investorideas.com Newswire) Saudi Arabia is starting to panic, and is growing concerned that the growing number of supply disruptions around the world could cause oil prices to spike.
The statement from Saudi Arabia added that there also was an understanding that oil-producing countries would need 'to compensate for any potential shortage of supplies.' It did not elaborate.
However, it is unclear how seriously to take Trump's claim of success.
Defending champion Germany knocked out of 2018 World Cup
The Swedes went through to the knockout rounds as the unlikely winners of Group F, taking the beaten Mexicans with them. Brazil need a point against Serbia to guarantee their place, while Switzerland just need draw as well.
"It basically leaves us with no spare capacity, at a time when Iran isn't the only issue", Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said in a Bloomberg television interview.
Saudi Energy Minister Khalid al-Falih met with U.S. Secretary of State Mike Pompeo in Washington on Thursday to discuss energy security. Trump deemed the deal "defective" because it was aimed at lifting some sanctions from Tehran in exchange for curbing Tehran's nuclear capabilities by the involved parties.
"The Trump support base is probably the part of the US electorate that will be the most sensitive to an increase in USA gasoline prices", Halff said.
A senior State Department official said this week that countries will need to cut their imports of Iranian oil to zero from November and exemptions are unlikely.
Helping driving prices higher is President Trump and his administration who has been warning countries no to go on using crude from Iran (China will ignore than).
With this move, the Trump administration has increased pressure on allies to stop funding to Iran.
Meanwhile, Leader of Iran's Islamic Revolution Ayatollah Seyyed Ali Khamenei slammed all-out USA economic and political measures against Tehran in a Saturday address, describing them as futile efforts to turn Iranians against the Islamic Republic. "This was managed between the two to rob the pocket of rest of the world".
However, Saudi Aramco CEO Amin Nasser told journalists in India on Monday that the state oil company has spare capacity of 2 million barrels of oil a day.