Trump says the Saudis are persuaded to act to help offset the high price of oil

U.S. President Donald Trump said he had persuaded Saudi Arabia to consider measures that would boost oil production, which would have pushed the world's largest exporter to threaten to blow up a fragile truce approved by the OPEC last week. I just spoke to King Salman of Saudi Arabia and explained to him that because of turmoil and dysfunction in Iran and Venezuela, I ask Saudi Arabia to increase its oil production, perhaps up to 2,000,000 barrels. too high! He agreed!, "Trump said on Twitter on Saturday.

Saudi King Salman bin Abdulaziz and Trump, in a phone call on Saturday, discussed the efforts of oil-producing countries to make up for potential oil shortages The state-run Saudi Press Agency reported.The two leaders stressed the importance of maintaining the stability of the oil market, according to the report. "The agency did not say that the leaders accepted or were referring to 2 million barrels.

The phone is another sign of improving US-Saudi relations under Trump over the Obama administration who alienated the kingdom by seeking agreement Iran with Trump last year chose Saudi Arabia for its first trip abroad.Since then, both governments have announced hundreds of billions of dollars worth of contracts , Trump boasting openly the number of US jobs that the Saudis were helping to create.

Output Cuts

At a meeting of the Petroleum Exporting Organization The countries of Vienna last weekend, Saudi Arabia – the largest producer of the group – [19659008] agreed to reduce its compliance with the production cuts that were put in place since early 2017. The Saudi energy minister Khalid Al-Falih The group's action would add up to $ 40,000. a million barrels a day at the market.

Brent Brut, the world's oil index, reached $ 80 a barrel on May 17, the highest level since November 2014. It closed Friday at $ 79.44.

If Saudi Arabia were to respond to Trump's request, it would expand the world's reserve production capacity to the limit, which means that any supply breakdown could have a disproportionate effect on prices. petrol. This could exacerbate other OPEC members, such as Iran and Venezuela, who initially sought to prevent any increase as OPEC and allies led by Russia would go to their meetings in Vienna

"We will be in unknown territory". Sen, chief oil analyst at Energy Aspects Ltd. in London, said. "While Saudi Arabia has the capacity in theory, it takes time and money to put these guns online, up to a year," she said [19659006] Spare Capacity

Saudi Arabia has a capacity of 12.04 million barrels a day, according to the International Energy Agency. The kingdom pumped a little over 10 million barrels a day in May, leaving exactly the 2 million barrel a day hole that Trump was asking the Saudi king to use now.

Oil analysts believe that the kingdom can produce more than 12 million barrels a day in an emergency through a so-called surge, in which the oil fields are exhausted beyond what the engineers consider it a reasonable rate. In addition, Saudi Arabia shares with Kuwait a so-called neutral zone that has not been used in the last two years and allows pumping as much as 500,000 additional barrels per day.

& # 39; Ramp Up & # 39;

"Saudi Arabia may use some of its stocks to boost exports, visible to the US President, while it takes time to increase the operating capacity," said Olivier Jakob, Director of Petromatrix GmbH

. concocted a delicate agreement to satisfy some members, such as Iran and Venezuela, who wanted to limit production, and others like the Saudis, who sought to free themselves from supply cuts.

Venezuela is in the midst of an economic crisis that has brought down oil production. In early May, the Trump administration said that it would renew US sanctions against Iran and that it was seeking to cut back on Iranian oil purchases by $ 50,000. other foreign buyers.

If Saudi Arabia accepts Trump's request, "that means he's calling them to leave the OPEC," said Iran's OPEC Governor, Hossein Kazempour Ardebili . "A country can in no case exceed its production quota by 2 million barrels unless it leaves OPEC."

– With the help of Grant Smith and Abbas Al Lawati