Trump asks Saudi Arabia to increase oil production

Trump asks Saudi Arabia to increase oil production | TheHill

Trump asks Saudi Arabia to increase oil production | TheHill

In a tweet on Saturday, Trump said King Salman bin Abdulaziz Al Saud had agreed to his request to boost production by "maybe up to 2,000,000 barrels".

The group, which has curbed output since 2017 in an attempt to address a global supply glut, said it would return to 100 percent compliance with previously agreed output cuts, after months of underproduction, partly due to unplanned disruptions.

Trump implied on Twitter that he had asked the king in a phone call to increase oil production in hopes of greater supply bringing costs down in the U.S., which have risen since America stopped importing Iranian oil.

Khalid Al Falih, Saudi Arabia's energy minister, stated that the new agreement implies an output increase of one million barrels per day, while other Opec members indicated an increase of 500,000 to 800,000 bpd.

US President Donald Trump and Saudi Arabia's King Salman attend a signing ceremony at the Saudi Royal Court in Riyadh.

The administration has threatened key allies such as South Korea with sanctions if they do not cut off Iranian imports by early November. Every month, it usually buys around 5.5 million to 6 million barrels of oil from Iran. Total's chief executive Patrick Pouyanne said last month that it was unthinkable for any worldwide company to risk being excluded from the United States financial system - the penalty for buying Iranian crude beyond November 4.

The OPEC cartel recently agreed to pump 1 million barrels more crude oil per day.

A JXTG spokesman would not comment on individual deals but said: "U.S. crude is one of the candidates for replacing Iran oil".

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During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked due to the European and United States sanctions. John Browne, former BP chief executive and current chairman of L1 Energy Holdings, anticipated a drop of as much as 1.5 million bpd.

Russia, Iraq, the UAE and Kuwait jointly have another million barrels, so there is spare production of 3 million barrels a day.

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).

US oil output has remained near record levels, but the rig count, an indicator of future production, fell by four rigs in the latest week to 858, according to Baker Hughes. "He has agreed!" the tweet read.

OPEC and Russian Federation have said they will raise output to meet demand and replace crude from unplanned disruptions.

"Saudis are used to US requests for oil", Halff said.

The media outlet also reported that Swiss lender Banque de Commerce et de Placements told its clients it would stop financing Iranian oil cargoes by the end of June. Turkey stood at 9 percent and Italy at 7 percent. State Department officials said this week the United States is prepared to work with countries on a case-by-case basis to help them reduce imports of Iranian oil and suggested some exemptions were possible.

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