Saudia Arabia's leader has promised U.S. President Donald Trump that the country will produce more oil if needed and that it has 2 million barrels per day of spare capacity, the White House said on Saturday. The announcement was made following a cabinet meeting headed by Saudi Arabia's King Salman bin Abdulaziz Al Saud.
Outside North America, looming USA sanctions against major oil exporter Iran were the focus of attention.
The issue is of concern as crude oil prices hit four-year highs. Interestingly, the price of oil did not rise in these two wars. As it stands now, Iran will have exported 2.2 million barrels of crude oil this June.
Crude oil prices saw mixed activity today, widening the spread between WTI and Brent crude as Libya's oil production continues to suffer at the hands of the two rival NOC factions who are determined to duke it out.
A recent decision by the Organization of the Petroleum Exporting Countries (OPEC) to increase the cartel's own production by 1 million barrels a day has yet to tamp down prices.
Kazempour said Trump was trying to intensify tensions between Iran and Saudi Arabia.
Recent price rises have also been spurred by a U.S. announcement that it plans to re-introduce sanctions against Iran from November, which will also target its oil industry. Average pump prices in the USA are up 13 percent this year, rising above $3 a gallon in April for the first time since 2014.
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A survey of analyst expectations from S&P Global Platts revealed expectations of a drain on USA crude oil inventories of 4.5 million barrels last week, adding support to the concerns about a market deficit.
Despite these measures to replace disrupted supplies, Goldman Sachs said in a July 4 note to clients that "the market will remain in deficit" in the second half of the year.
Trump has been complaining about OPEC at the same time that Washington is piling pressure on its European allies to stop buying Iranian oil.
Secondly, a higher production by Saudi Arabia not necessarily would translate into higher global production since it is already declining in Libya, Nigeria, and Venezuela amid expectations that exports from Iran would decline, once the sanctions set in.
That kind of talk is part of a broader game Saudi Arabia played to master the oil market. Yet presidents have long pressured its top producer Saudi Arabia to adjust oil production policies, usually to lower gasoline prices.
China's customs agency said on its website that Chinese tariffs on USA goods would immediately be implemented in retaliation.