Saudi king said will boost oil output if needed: White House

Saudi king said will boost oil output if needed: White House

Saudi king said will boost oil output if needed: White House

It did not elaborate.

"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference..." Since the lifting of sanctions in 2016, Iran has returned as a major oil supplier, selling around 2.5 million barrels a day, or more than 2 percent of global supplies.

President Donald Trump has asked Saudi Arabia's king to increase oil production to make up for a shortfall from Iran and Venezuela.

Oil prices rose last week, partly due to U.S. plans to reimpose sanctions on Iran, a major oil producer.

A gallon of regular gasoline sold on average in the USA for $2.85, up from $2.23 a gallon previous year, according to AAA.

Saudi Arabia is the world's largest exporter of crude oil, exporting 7 million barrels a day. Prices spiked after the agreement was released.

FGE, an energy consultancy, said in its June newsletter that the USA is determined to "push Iran's exports to zero".

Oil analysts and consultants nonetheless think the kingdom can produce more than 12 million barrels a day in an emergency through a so-called surge, in which oil fields are depleted beyond what engineers consider a reasonable rate.

Trump appears to be trying to "talk the market down", said Lawrence Goldstein, who directs the Energy Policy Research Foundation.

With this move, the Trump administration has increased pressure on allies to stop funding to Iran. He also noted it always takes at least two months before a change in shipping commitments affects the market. U.S. Energy Secretary Rick Perry said Thursday that lower amounts of Iranian oil were straining the market.

"The Trump support base is probably the part of the U.S. electorate that will be the most sensitive to an increase in USA gasoline prices", Halff said. It closed Friday at $79.44 a barrel.

Saudi Arabia along with other Organization of Petroleum Exporting Countries (OPEC) and non-OPEC nations, including Russian Federation, had agreed on June 22 to boost production by a combined 700,000 to 1 million barrels a day, so any 2 million bpd-increase would be at least double market expectations.

He did not specify if the figure was barrels per day (bpd), the normal measure for oil production. Trump's tweet offered no timeframe for the additional 2 million barrels - whether that meant per day or per month. "We will do whatever is necessary to keep the market in balance", the Saudi energy minister, Khalid Al-Falih, told journalists at OPEC headquarters in Vienna at the end of the meeting, with Russia's energy minister Alexander Novak seated at his side.

In this scenario, Saudi Arabia, the UAE, Kuwait and Iraq are the main countries that have the capacity to increase production, she said. Saudi Energy Minister Khalid Al-Falih indicated the group's action would add almost one million barrels a day to the market.

Iran had been pushing hard for oil producers to hold output steady as USA sanctions are expected to hit its exports. But broadcasting its requests on Twitter with a number that stretches credibility opens a new chapter in US-Saudi relations, Halff said.

At the OPEC meeting last week, Iran's oil minister said that the cartel should not be influenced by Trump and should deal with supply and demand. "They're not used to this kind of public messaging". Trump ordered the re-imposition of USA sanctions against Iran that were suspended under the accord. South Korea accounted for 14 percent of Iran's oil exports a year ago, according to the US Energy Department.

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