Saudi Arabia says ready to boost oil production, taking aim at Iran

Saudi Arabia says ready to boost oil production, taking aim at Iran

Saudi Arabia says ready to boost oil production, taking aim at Iran

Western diplomats say few major firms would see enough profit in dealing with Iran to justify the risk of losing access to U.S. trade and finance.

Iran is looking at ways to keep exporting oil as well as other measures to counter sanctions after the United States told allies to cut all imports of Iranian oil from November.

Trump, who is spending the weekend at his golf property in New Jersey, said in a tweet on Saturday that Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud of Saudi Arabia had agreed to produce more oil.

Earlier in the week, Reuters reported that OPEC pumped 32.32 million bpd in June, up 320,000 bpd from May.

Brent oil rose on Wednesday, driven higher by a threat from an Iranian commander and a drop in US crude inventories for the second week in a row. The official spoke on the condition of anonymity under State Department ground rules.

"On China, India - yes, certainly".

As a result of those sanctions, companies that do business with Iran could face penalties from the U.S. It was previously unclear if the U.S. would penalize European nations that chose to remain in the Obama-era agreement. Tehran, however, vowed on Sunday to foil any USA bid to block its oil exports.

Crude prices ended slightly higher on Tuesday after a volatile session in which the USA benchmark passed $75 a barrel for the first time in more than three years before turning negative and later recouping its losses.

Iranian President Hassan Rouhani appeared on Tuesday to threaten to disrupt oil shipments from neighbouring states if Washington continued to press all countries to stop buying Iranian oil.

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Saudi Arabia later acknowledged a call had taken place between Trump and Saudi Arabia's King Salman, but did not mention any production targets. "Prices to high! He has agreed!"

The president, in an interview with Fox News' "Sunday Morning Futures with Maria Bartiromo", also said he would not complete a new NAFTA trade deal with Canada and Mexico until after the November congressional elections.

Norway-based Rystad Energy expects Iranian production to drop by 700,000 bpd by December 2018.

(ADNOC) said on Tuesday it could increase production by several hundred thousand barrels per day if needed.

He added, "We will prove that the USA claim to stop exportation of Iran's oil is an illusion".

Trump's move comes as the world suddenly finds itself dangerously short of meeting rising global demand that's set to hit 100 million barrels per day by the fourth quarter, compared to 98.7 million during the same period previous year. Analyst expectations were for a draw of 1 million barrels.

The issue is of concern as crude oil prices hit four-year highs. About 450,000bpd of exports has been lost due to Libyan conflict.

"We are working to minimize disruptions to the global market, but we are confident there is sufficient global spare oil capacity", Hook said.

While OPEC leader Saudi Arabia will pick up the slack, Morgan Stanley believes oil markets will be undersupplied by around 600,000 in the second half of 2018. "We are also working with oil market participants, including producers and consumers, to ensure market stability".

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