US President Donald Trump says Saudi Arabia’s King Salman has agreed to his request to increase oil output “maybe up to” two million barrels, as state media in Riyadh confirmed a phone call between the two leaders about oil production but mentioned no specifics.
Trump’s claim on Saturday comes after the Organization of the Petroleum Exporting Countries (OPEC), a grouping of oil-producing states that includes Saudi Arabia, already agreed to ramp up production by a million barrels a day at a meeting earlier this month.
“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction [sic] 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,” the US president wrote on Twitter on Saturday.
“Prices to [sic] high! He has agreed!” Trump added, without specifying the timeframe for the increased production or whether his two million figure referred to barrels per day.
Later on Saturday, the official Saudi Press Agency (SPA) said King Salman had spoken to Trump on the need to maintain oil market stability and global economic growth, but gave no further details about an output rise.
“During the call, the two leaders stressed the need to make efforts to maintain the stability of oil markets and the growth of the global economy,” SPA said.
They also discussed “efforts by the oil-producing countries to compensate for any potential shortage in supplies,” it added.
Saudi Arabia is the world’s top oil exporter and has usually kept at least 1.5 million to two million barrels per day of spare capacity, according to the United States Energy Information Administration. It produces around 10 million barrels of crude a day, according to OPEC.
The Trump administration is pushing countries to cut all imports of Iranian oil from November when the US re-imposes sanctions against Tehran, after Trump withdrew from a 2015 nuclear deal agreed between Iran and six major powers.
US 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 follow-up agreement to halt its nuclear programmes.
Al Jazeera’s Rosiland Jordan, reporting from Washington, DC, said “it is not unusual” for the White House to put pressure on OPEC members to increase oil output “mainly because the US president is, first and foremost, concerned about the cost of gasoline and consumer fuels, especially in an election year” – the US will hold midterm congressional polls in November.
She added, however, that what Trump is suggesting, amid the pressure imposed to other countries to stop accepting Iranian imports, is much more complicated than simply persuading or not persuading Riyadh to change its output levels.
“This is a situation where US shale oil production itself has dropped in the past few months and that drop in the inventory has pushed oil prices up,” Jordan said.
“There is also some analysis from energy sector experts who say that Saudi Arabia could perhaps increase its daily output but it would only be for a very short time and the quality of the oil produced would be very low and very difficult to refine.”
Jordan added: “It’s noteworthy that the Saudis did not want to say that they are committed in any official output level, that they would be inclined to have any financial dealings with Iran in the face of any possible US sanctions.”
Iran accuses US of economic pressure
In the run-up to the latest OPEC meeting, Riyadh, backed by Moscow, had argued strongly in favour of increasing production as grumbles in major consumer countries like the US, India and China have grown about higher prices.
Iran opposed any changes to the original production-cut deal at a time when its oil industry is facing renewed sanctions over Trump’s decision to quit the international nuclear deal with Tehran. In the end, both sides were able to save face.
Analysts said the outcome of the discussions between the Saudi and US leaders may have far-reaching benefits for both sides.
“It is a strategic move [from Saudi Arabia] to side with Trump at this point and I think what we have seen so far is a combination of an oil price war as well as an indirect diplomatic confrontation between the Iranians and other OPEC members,” Mohammed Cherkaoui, professor of conflict resolution at George Mason University, told Al Jazeera from Washington, DC.
“If this trend, what the Russians and the Saudis have offered, I think it will lead to an implosion of the OPEC as an international trade institution,” Cherkaoui added.
Meanwhile, Iran’s Supreme Leader Ayatollah Ali Khamenei on Saturday accused the US of trying to turn Iranians against their government.
“They bring to bear economic pressure to separate the nation from the system … but six US presidents before him tried this and had to give up,” Khamenei was quoted as saying on Saturday by his website, referring to Trump.
Iran’s rial currency has lost up to 40 percent of its value since last month, when Trump pulled out of the 2015 nuclear deal.
Iran’s OPEC governor, Hossein Kazempour Ardebili, accused the United States and Saudi Arabia of trying to push up oil prices and said both countries are acting against the foundation of OPEC.
“If this happens, [it] means Trump is asking Saudi Arabia to walk [away] from OPEC,” he told Reuters news agency.
“The market will go up to $100 I am sure as Saudi Arabia said they will plan an increase for July … This was managed between the two to rob the pocket of rest of the world.”
Source: Al Jazeera, News Agencies