Saudi agrees to US request to pump more oil

Kingdom is prepared to utilise its spare production capacity to deal with changes in the levels of supply and demand.

Trump and Saudi King Reuters
Trump wants Saudi to pump more oil to maintain market stability and global economic growth [Daylife]

Saudi Arabia’s cabinet on Tuesday endorsed the kingdom’s readiness to pump more oil to maintain market balance and stability, the official Saudi Press Agency (SPA) said.

“The kingdom is prepared to utilise its spare production capacity when necessary to deal with any future changes in the levels of supply and demand,” a cabinet statement said, following a meeting chaired by King Salman.

US President Donald Trump on Saturday said Saudi Arabia’s King Salman had agreed to his request to increase oil output “maybe up to” two million barrels.

Trump said the agreement was reached after a phone call with the Saudi King about oil production but mentioned no specifics.

Both leaders also discussed “efforts by the oil-producing countries to compensate for any potential shortage in supplies,” SPA reported.

Trump’s claim 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.

Non-OPEC member Russia on June 23 also backed the effort, capping a week of tense diplomacy for the bloc that averted a damaging rift between regional rivals Iran and Saudi Arabia.

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 US Energy Information Administration. It produces around 10 million barrels of crude per day, according to OPEC.

The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States 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 new agreement to halt its nuclear programmes.

Iran’s OPEC governor, Hossein Kazempour Ardebili, accused the US and Saudi Arabia of trying to push up oil prices and said both countries are acting against the foundation of OPEC.

Source: Al Jazeera, News Agencies