Trump Says Saudis Must Compensate For Drop In Iran Oil Supply

Trump Says Saudis Must Compensate For Drop In Iran Oil Supply
President Trump lashes out at OPEC with a warning to stop manipulating oil markets and piles pressure on US ally Saudi Arabia.


BERKELEY HEIGHTS, N.J., July 2 (Reuters) - President Donald Trump lashed out at OPEC with a warning to stop manipulating oil markets and piled pressure on U.S. ally Saudi Arabia to raise supplies to compensate for lower exports from Iran.

Trump said in a tweet on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to produce more oil.

The White House later walked back the president's comments, saying the king had said his country could raise oil production if needed.

On Sunday, in an interview with Fox News' "Sunday Morning Futures with Maria Bartiromo," Trump reiterated his call on Saudi Arabia to raise production to a new record, arguing that it should help the United States lower fuel prices since Washington is helping Riyadh in its struggle against Tehran.

"Don’t forget the one negative to the Iran deal is that you lose a lot of oil, and they got to make up for it. And who is their big enemy? Iran. OK. You think of it. Iran is their big enemy, so they are going to have to do it," Trump said.

"And I have a very good relationship with the (Saudi) king and with the crown prince of Saudi Arabia and with the others around and they are going to have to put out more oil."

Oil prices rose last week on worries that U.S. sanctions against Iran would take away significant volumes of crude oil from world markets while oil demand worldwide increases.

Earlier this year, to the chagrin of European partners, Trump said he would pull the United States out of the Iran nuclear agreement secured by world powers.

On Monday, Brent oil prices were around 1 percent lower but not far from $79 per barrel as analysts have warned of thin global spare capacity to offset potential supply disruptions.

Rising gasoline prices could create a political headache for Trump ahead of the November elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the economy.

On Fox, Trump directed blame at the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the biggest producer.

Asked whether someone was manipulating oil markets, Trump said: "100 percent. OPEC is and they better stop it because we're protecting those countries, many of those countries."

"OPEC is manipulating, and you know they allowed (a production increase) less than we thought last week. They have to put out another 2 million barrels in my opinion, because we don’t want that happening," Trump said.

Trump was referring to OPEC's decision to raise output together with its non-OPEC allies by around 1 million barrels per day, although since then Saudi Arabia has pledged to raise production to a new record.


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J Hemsath  |  July 06, 2018
Do you think he doesn't really understand the global market and that oil is a commodity? Exploration and development of oil in the US is price driven - in Alaska the current price is just about high enough to encourage the producers to step up exploration. A similar thing in the shale oil field, North Dakota has been a ghost town since the price of crude collapsed 3 years ago. For years OPEC has used production as a vehicle to inhibit US development and he is now asking them to do the same.
Russell Hopley  |  July 03, 2018
Let the market forces prevail and sort out oil and gas production levels. No need for the US to 'jawbone' other countries to do this.