Trump Says Saudia Arabia Will Increase Oil Production

Trump Says Saudia Arabia Will Increase Oil Production

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President Trump tweeted on Saturday that Saudi Arabia, a major international oil supplier, has agreed to increase oil production.

Mr. Trump has repeatedly called for an increase in production to ease rising oil prices.

Saudi Arabia is the de facto leader of the Organization of the Petroleum Exporting Countries, and had previously been wary of increasing production to address rising oil prices.

Mr. Trump tweeted that Saudi Arabia might raise production by up to two million barrels a day.

Mr. Trump’s tweet comes after Saudi Arabia, an ally of the United States, and other major oil-producing countries, including Russia, had agreed this month to jointly increase their exports. It was unclear whether the numbers in Mr. Trump’s tweet were in addition to the previously announced agreement.

Saudi Arabia’s energy minister, Khalid al-Falih, said this month that an increase in production could help stave off a spike in prices like that of 2014, when prices topped $100 a barrel, only to be followed by a sudden crash.

In a statement on Saturday, Saudi Arabia said that King Salman had spoken to Mr. Trump and that the leaders discussed the need to address any potential shortages in the supply of oil as well as maintain stability in the oil markets. The statement did not include any specific figures.

The proposed increase by Saudi Arabia would be a blow to Iran, another major oil producer that, along with Saudi Arabia and other countries, make up OPEC.

Iran is already producing close to its maximum capacity, and will likely suffer from an increased supply, which would force prices lower and reduce government revenues as Tehran warily eyes American sanctions on its energy sector.

In 2016, OPEC, Russia and other oil producers, in a rare show of collaboration, agreed to limit production to once again prop up oil prices.

Despite Saudi Arabia’s intention to increase production, the effect on oil prices is muddied by the possible impact of American sanctions on Iran’s oil sector, and the collapse of Venezuela’s oil industry.

(Original source)

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