Trump says he's called OPEC and told the cartel to lower fuel prices

Earlier this week, the administration announced that it would not extend the waivers allowing several countries to continue buying Iranian crude despite US sanctions against the Islamic Republic. Oil prices jumped more than 3% in the two days following the announcement.

The administration said it had secured a commitment from Saudi Arabia, the United Arab Emirates and other allies to fill any gaps left by the expected fall in Iranian stocks.

However, the influential Saudi energy minister, Khalid al-Falih, said earlier this week that it was not necessary to immediately start extracting more oil, and that the kingdom would only increase production when customers demand more supplies.

Bill Farren-Price, geopolitical badyst at RS Energy Group, said there was a subtle but considerable dissonance between the US and Saudi statements following the announcement of the lifting of the lifting of sanctions.

"I think that when you really badyze what the Saudis have said, it is actually only a reformulation of their existing supply policy, namely that they will always look for to work to keep the markets in balance and close the gap, "he said.

Many badysts believe that OPEC members are unlikely to proactively increase their production, especially as oil prices collapsed after Saudi and other producers took similar action. in view of the renewal of Iranian sanctions on energy. This could tighten world oil reserves in the short term, supporting Brent prices between $ 70 and $ 75 per barrel.

"I think any change to add barrels in the event of a deficit will be deliberate, but rather slow and attentive to the broader market equilibrium, which is quite oversupplied, especially in the 2020 horizon," he said. said Farren-Price.

OPEC and its oil market allies, including Russia, are trying to maintain 1.2 million barrels a day in the market, in order to drain excess supply of crude oil and raise prices after the crisis. # 39; collapse. US crude grew by 39% this year, while Brent rose about 34%.

The Saudis can increase production without violating the agreement, as they pump about 500,000 b / d below their quota.