OPEC, Russia rebuff Trump’s call on crude oil
OPEC’s leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, ruled out on Sept. 23 any immediate, additional increase in crude output, effectively rebuffing U.S. President Donald Trump’s calls for action to cool the market.
Benchmark Brent oil reached $80 a barrel this month, prompting Trump to reiterate on Sept. 20 his demand that the Organization of the Petroleum Exporting Countries lower prices.
The price rally mainly stemmed from a decline in oil exports from OPEC member Iran due to fresh U.S. sanctions.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!” Trump wrote on Twitter.
“My information is that the markets are adequately supplied. I don’t know of any refiner in the world who is looking for oil and is not able to get it,” Falih said.
Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as U.S. sanctions on Iran were creating new challenges for oil markets.
Higher gasoline prices for U.S. consumers could create a political headache for Republican Trump before mid-term congressional elections in November.
Iran, OPEC’s third-largest producer, has accused Trump of orchestrating the oil price rally by imposing sanctions on Tehran and accused its regional arch-rival Saudi Arabia of bowing to U.S. pressure.
On Sept. 23, Iranian oil minister Bijan Zanganeh said Trump’s tweet “was the biggest insult to Washington’s allies in the Middle East”.
In June this year, however, after months of cutting by more than their pact had called for, largely due to involuntary reductions from Venezuela and other producers, they agreed to boost output by returning to 100 percent compliance.
That equates to an increase of about 1 million bpd, but the latest figures show they are some way from achieving that target.
In August, OPEC and its allies cut production by 600,000 bpd more than their pact required, mainly as a result of falling output in Iran as customers in Europe and Asia reduced purchases ahead of the U.S. sanctions deadline.
Falih said returning to 100 percent compliance was the main objective and should be achieved in the next two to three months.
“We have the consensus that we need to offset reductions and achieve 100 percent compliance, which means we can produce significantly more than we are producing today if there is demand,” Falih said.