Trump says Saudi king agreed to raise oil output by up to 2 million barrels

[rooster59]

Trump says Saudi king agreed to raise oil output by up to 2 million barrels

By Lesley Wroughton and Stephen Kalin

 

FILE PHOTO: U.S. President Donald Trump speaks to the press aboard Air Force One en route to Bedminster, New Jersey, from Joint Base Andrews, Maryland, U.S., June 29, 2018. REUTERS/Eric Thayer

 

WASHINGTON/RIYADH (Reuters) - U.S. President Donald Trump said on Saturday that Saudi Arabia's King Salman had agreed to his request to increase oil production "maybe up to 2,000,000 barrels," an extraordinary amount not confirmed by the kingdom and which would push the OPEC leader to a level of production never tested before.

 

In an early morning tweet, Trump said Saudi Arabia's expanded production would help offset a decline in supply from Iran, after the United States pulled out of the Iran nuclear deal in May and moved to reimpose oil sanctions.

 

"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction 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 ... Prices to high! He has agreed!" Trump tweeted.

 

He did not specify if the figure was barrels per day (bpd), the normal measure for oil production.

 

Saudi Arabia is the world's top oil exporter and the Organization of Petroleum Exporting Country's biggest producer.

 

A week ago OPEC and its allies including Russia agreed to boost supplies, easing curbs in place since the start of 2017. They did state how much extra supply they would add.

 

In briefings since then, OPEC officials have signaled the extra volume is likely to be in the range of 700,000 to 1 million bpd. A request by Trump for 2 million bpd more would be at least double market expectations.

 

Saudi state media reported that during the call, the Saudi king and Trump emphasized the need to preserve oil market stability and efforts of oil-producing countries to compensate for any potential shortage.

 

The statement reported by Saudi media did not mention any intention by Saudi Arabia to raise production by 2 million barrels per day. Saudi oil officials did not immediately comment.

 

Saudi Arabia has a maximum sustainable capacity of 12 million bpd, but it has never tested that level of production.

 

Benchmark Brent crude <LCOc1> was trading around $79 a barrel on Friday, and a Reuters poll showed prices look to remain strong for the rest of this year due to supply disruptions in countries including Libya and Venezuela and as the extra oil from OPEC fails to meet rising demand.

 

Riyadh plans to boost output to 11 million bpd, the highest in its history, in July up from 10.8 mln in June, a source familiar with Saudi output plans told Reuters this week.

 

It was not immediately clear what level of production Trump was referring to or by when.

 

"We will be in uncharted territory. While Saudi Arabia has the capacity in theory, it takes time and money to bring these barrels online, up to one year," said Amrita Sen of consultancy Energy Aspects.

 

Saudi Energy Minister Khalid al-Falih met with U.S. Secretary of State Mike Pompeo in Washington on Thursday to discuss energy security.

 

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 the 2015 nuclear deal agreed between Iran and six major powers, calling it a "defective" agreement.

 

That agreement sought to curb Tehran's nuclear capabilities in exchange for the lifting of some sanctions. Trump ordered the re-imposition of U.S. sanctions against Iran that were suspended under the accord.

 

U.S. officials are pressing allies in Europe, Asia and the Middle East to adhere to the sanctions, which are aimed at pressuring Iran to negotiate a follow-up agreement to halt its nuclear programs.

 

State Department officials said this week the United States is prepared to work with countries on a case-by-case basis to help them reduce imports of Iranian oil and suggested some exemptions were possible.

 

Iran's Supreme Leader Ayatollah Ali Khamenei on Saturday accused Washington of trying to turn Iranians against their government.

 

"They bring to bear economic pressure to separate the nation from the system ... but six U.S. presidents before him tried this and had to give up," Khamenei was quoted as saying on Saturday by his website Khamenei.ir, referring to Trump.

 

Iran's rial currency has lost up to 40 per cent of its value since last month, when Trump pulled out of the 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.

 

"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," he said.

 

Kuwait planned to raise oil output by 85,000 barrels per day starting on Sunday, part of an agreement between OPEC and non-OPEC producers to increase production by 1 million bpd, its Energy Minister Bakhit al-Rashidi said on Saturday.

 

"Kuwait will raise its oil production from tomorrow to 2.785 million barrels, a daily increase of 85,000 compared to May, based on last week's production cut agreement," Rashidi told Arabic-language daily Al-Rai.

 

 

-- © Copyright Reuters 2018-07-01

 

 

[candide]

Reward for not citing Saudi Arabia in the Trump Administration's critics of the UNHRC?

[bristolboy]

15 minutes ago, candide said:

Reward for not citing Saudi Arabia in the Trump Administration's critics of the UNHRC?

Well it might be a reward for that if in fact Trump is telling the truth. Always a dubious assumption.

[Expatthailover]

1 hour ago, bristolboy said:

Well it might be a reward for that if in fact Trump is telling the truth. Always a dubious assumption.

Truth and trump have long been estranged.

[pegman]

Obama got the price of gas to stay low. It was Trump who raised the price with his nonsense actions against Iran.

[bristolboy]

2 minutes ago, pegman said:

Obama got the price of gas to stay low. It was Trump who raised the price with his nonsense actions against Iran.

I don't think Obama deserves credit for that. That's more or less the equivalent of saying Trump deserves credit for the strong economy.  In both cases they both just happened to be Presidents when this occurred.

But for the price of gas being higher now than it otherwise should be, Trump should definitely take a bow.

[pegman]

8 minutes ago, bristolboy said:

I don't think Obama deserves credit for that. That's more or less the equivalent of saying Trump deserves credit for the strong economy.  In both cases they both just happened to be Presidents when this occurred.

But for the price of gas being higher now than it otherwise should be, Trump should definitely take a bow.

A major reason that oil went and then remained at a low price was because of increased American production. Even as the Saudis and OPEC were cutting their flows the price kept dropping. Obama was under a lot of pressure from environmentalist supporters of his to surpress that from happening. I think he deserves credit for that. Personally I hated him for it because my country has a petro currency that got killed. My pension in those petro $$$ went not nearly as far on Walking.

[watcharacters]

15 minutes ago, pegman said:

A major reason that oil went and then remained at a low price was because of increased American production. Even as the Saudis and OPEC were cutting their flows the price kept dropping. Obama was under a lot of pressure from environmentalist supporters of his to surpress that from happening. I think he deserves credit for that. Personally I hated him for it because my country has a petro currency that got killed. My pension in those petro $$$ went not nearly as far on Walking.

 

 

But you're OK today.

[pegman]

24 minutes ago, watcharacters said:

 

 

But you're OK today.

Slowly started to recover when Trump started his tariff nonsense.

[bristolboy]

Here comes a shocker:

White House Backs Off Tweet on Saudis Helping Lower Oil Prices

 

• Both sides now say supply discussed with no targets set
•  
  Trump, King Salman discussed need to balance oil markets

https://www.bloomberg.com/news/articles/2018-06-30/trump-asks-saudi-arabia-to-boost-oil-output-to-offset-high-price

[Ulic]

Meaningless, like internet speeds "up-to" is a meaningless number. A minimum increase of   ...............   has

more meaning. That is of course if Trump is even to be believed at all.

[blazes]

"I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference ... Prices to [sic] high! "

 

Looks like it is now King Donald bin Trump, master of the world.  God is Great.

 

Cut out the Iranian oil and (one of Trumpy's deals) you will make the Saudis happy.  In return, the Saudis will go easy on Israel and buy a lot of nice killer fighter-jets from Uncle Sam's many dealers in Weapons of Mass Destruction.

 

The fact that Trump is making any kind of deal with the Saudis is a terrible slight on the memory of those who died on 9/11.

[Basil B]

Presume other heads of state have been talking to king Salman too...

 

But they do not jump on twitter to steal the credit.

[Morch]

2 hours ago, blazes said:

"I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference ... Prices to [sic] high! "

 

Looks like it is now King Donald bin Trump, master of the world.  God is Great.

 

Cut out the Iranian oil and (one of Trumpy's deals) you will make the Saudis happy.  In return, the Saudis will go easy on Israel and buy a lot of nice killer fighter-jets from Uncle Sam's many dealers in Weapons of Mass Destruction.

 

The fact that Trump is making any kind of deal with the Saudis is a terrible slight on the memory of those who died on 9/11.

 

Making deals with Saudi Arabia post 9/11 is bad.

Making deals with Iran post the hostage crisis is good.

Makes perfect sense.

[ExpatOilWorker]

2 hours ago, blazes said:

"I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference ... Prices to [sic] high! "

 

Looks like it is now King Donald bin Trump, master of the world.  God is Great.

 

Cut out the Iranian oil and (one of Trumpy's deals) you will make the Saudis happy.  In return, the Saudis will go easy on Israel and buy a lot of nice killer fighter-jets from Uncle Sam's many dealers in Weapons of Mass Destruction.

 

The fact that Trump is making any kind of deal with the Saudis is a terrible slight on the memory of those who died on 9/11.

You prefer to have a nuclear armed Iran?

[The Deerhunter]

4 hours ago, pegman said:

A major reason that oil went and then remained at a low price was because of increased American production. Even as the Saudis and OPEC were cutting their flows the price kept dropping. Obama was under a lot of pressure from environmentalist supporters of his to surpress that from happening. I think he deserves credit for that. Personally I hated him for it because my country has a petro currency that got killed. My pension in those petro $$$ went not nearly as far on Walking.

Yeah.  I was always surprised about Obama there.  Ronald Reagan did it to the Russians with "Star Wars."  Obama, the supposed closet Muslim, did it to the Muslim world with oil.   We live in interesting times.  Now Donald wants to reverse it.  But never mind.  He knows what he is doing when it comes to wheeling & dealing.  He wrote the book, right?    Well, lets see how the North Korea thing pans out eventually.  As J. R . Ewing used to say, "The opree aint over til the fat lady (or fat boy, in this case) sings. And the rumors are out there saying that Plutonium enrichment has never stopped.  Reprise: We live in interesting times!!

[Srikcir]

3 hours ago, bristolboy said:

Here comes a shocker:

White House Backs Off Tweet on Saudis Helping Lower Oil Prices

 

• Both sides now say supply discussed with no targets set
•  
  Trump, King Salman discussed need to balance oil markets

https://www.bloomberg.com/news/articles/2018-06-30/trump-asks-saudi-arabia-to-boost-oil-output-to-offset-high-price

Increasing oil production made no economic sense.

It puts more supply into the world market and lowers the price.

What countries are hurt when oil prices drop?

As Warren Buffet says, "Only when the tide goes out do you discover who's been swimming naked."

To the "plus side" are oil exporters Venezuela and Iran.

But many more nations to the "negative side" that damage US foreign and domestic (Texas?) interests:

http://www.businessinsider.com/these-are-the-countries-affected-most-by-low-oil-prices-2017-7

For the US the "Break-even wellhead costs in key US shale oil basins now average between $US35-50 per barrel" in mid-2017.

[blazes]

7 hours ago, ExpatOilWorker said:

You prefer to have a nuclear armed Iran?

When you look around you, would you prefer a nuclear-armed Pakistan waving their nice nukes at India?  Or Israel at the whole Middle East?  Or China at the whole of South-East Asia?  Or Kimmy at S.Korea? or Russia at all of Europe?  Or the USA at the whole bleeding world?  

So, one set of bombs is better than another???

[bendejo]

20 hours ago, rooster59 said:

"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction 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 ... Prices to high! He has agreed!" Trump tweeted. 

 

To which the king replied "yeah, sure DT, whatever you say!  Anything else?"

 

The Saudis are preparing to take Aramco public, and are looking for US$100/barrel for a nice, fat (phat) IPO.  This is not a personal opinion nor secret, search and ye shall find.  A few weeks back someone running the show there said they'd be comfortable holding off on the IPO until next year.

 

In the past the Saudis have had a somewhat close relationship with the US, but these days they seem quite cozy with Russia, especially in regards to petroleum prices.

 

 

[Morch]

7 hours ago, blazes said:

When you look around you, would you prefer a nuclear-armed Pakistan waving their nice nukes at India?  Or Israel at the whole Middle East?  Or China at the whole of South-East Asia?  Or Kimmy at S.Korea? or Russia at all of Europe?  Or the USA at the whole bleeding world?  

So, one set of bombs is better than another???

 

These countries already got nukes. The question is whether it is wise to allow a club expansion. In other words, nuclear weapons already around are bad enough, hard to find reasonable arguments in favor of having more around. Other than that, yes - some "sets of bombs" may be less worrisome than others.