Will Saudi Arabia boost oil production?

Iran urges Opec to honour output cut as
Trump tweet sends prices plummeting

One-Minute Read

Last month, Opec, the cartel of oil-producing states, voted to
increase production by up to a million barrels a day in a bid to
keep spiralling oil prices steady.

However, fears that Trump had persuaded the Saudis to up
production were stoked by a tweet which send oil markets
tumbling.

This despite a senior Saudi official telling the The Wall Street
Journal that no specific promise had been made over production, but
rather assurances were given that the country had the capacity to
meet demand. The White House also attempted to row back from
Trump’s comments.

Rumours that Saudi Arabia could be willing to increase
production by more than a million barrels a day drew a stinging
rebuke from its regional rival Iran, which urged fellow Opec
members to “refrain from any unilateral measures”, warning that
they would undermine the unity of Opec.

The US decision to reimpose sanctions on Iran following its
withdrawal from the 2015 nuclear deal could, however, prove
problematic for the Trump administration which is looking to bring down oil prices.

The deteriorating political situation in Venezuela and Iran,
where major oil ports have been shut due to an internal power
struggle could also cut global production and further increase
prices.

To this end, the New York Times says that “Saudi help in
making up for lost Iranian crude oil will be crucial to Mr. Trump’s
efforts to contain Iran while not forcing prices up too high to
cause political damage in the United States”.