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BERKELEY HEIGHTS, N.J. – President Donald Trump said Saturday that he has received assurances from King Salman of Saudi Arabia that the kingdom will increase oil production, "maybe up to 2,000,000 barrels" in response to turmoil in Iran and Venezuela.
Trump wrote on Twitter that he had asked the king in a phone call to boost oil production "to make up the difference … Prices to (sic) high ! He has agreed! "
A little over an hour later, the state-run
" During the call, the two leaders stressed the need to make efforts
It added that there was an understanding that oil-producing countries would need to "compensate for any potential shortage of supplies."
Trump administration has pushed all of them from Iran following the US pulling out of the nuclear deal between Tehran and world powers. Prices also have a long lasting effect in the country and in the United States.
Last week, members of the Organization of the Petroleum Exporting Countries cartel led by Saudi Arabia and non-cartel members agreed to pump 1 million barrels more crude oil per day, a move that should help contain the recent rise in global energy prices. However, in the US, it is usually necessary to increase demand for oil, pushing up the price of gasoline in a midterm election year. A gallon of regular gasoline sold on average in the US for $ 2.85, up from $ 2.23 a gallon last year, according to AAA.
If Trump's comments are accurate, oil analyst Phil Flynn said it could immediately knock $ 2 or $ 3 off a barrel of oil. But he said it was unlikely that it would be possible to sustain it.
"We will need more oil to get to the top of the road," said Flynn, of the Price Futures Group.
Trump appears to be trying to "talk the market down," said Lawrence Goldstein, who direct the Energy Policy Research Foundation. He questioned whether Trump's words would do anything to reverse the effects of declining Iranian oil production.
Trump's aim may be to exert maximum pressure on Iran while at the same time not upsetting potential. Antoine Halff, a Columbia University researcher and former chief oil analyst for the International Energy Agency.
"The Trump support is probably part of the US electorate that will be the most sensitive to increase in US gasoline prices," Halff said.
Trump 's comments as Saturday as global financial markets were closed. Brent crude stood at $ 79.42 a barrel, while U.S. benchmark crude was at $ 74.15.
Saudi Arabia currently produces some 10 million barrels of crude oil a day. Its record is 10.72 million barrels a day. Trump's tweet offered no timeframe for the additional 2 million barrels – however that meant for day or per month.
However, Saudi Aramco CEO Amin Nasser told reporters in India on Monday that the oil company has spare capacity of 2 million barrels of oil a day. That was after Saudi Energy Minister Khalid al-Falih said the kingdom would honor the OPEC decision to stick to a 1-million-barrel increase.
The Trump Administration Has Been Counting on Saudi Arabia, "al-Falih said thereafter."
The trump administration has been counting on Saudi Arabia and other OPEC members to supply oil to offset the lost Iranian exports and prevent oil prices from rising sharply. But broadcasting its requests on Twitter with a number that stretches credibility opens a new chapter in U.S.-Saudi relations, Halff said.
"Saudis are used to U.S. requests for oil," Halff said. "They're not used to this kind of public messaging. I think the difficulty is for them to be a real one. "
The administration has allied them to South Korea with sanctions if they do not cut off Iranian imports by early November. South Korea accounted for 14 percent of Iran's exports last year, according to the United States Energy Department.
China is the largest importer of Iranian oil with 24 percent, followed by India with 18 percent. Turkey was at 9 percent and Italy at 7 percent.
The State Department reported the "vast majority" of countries with the US request.
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Gambrell reported from Dubai, United Arab Emirates . AP Writer Matt O'Brien contributed to this report from Providence, Rhode Island
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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