US president Donald Trump announces Saudi King Salman approval to increase oil production to offset any potential supply shortfall after Washington urged its allies to cut oil imports from Iran as part of the US sanctions package following its withdrawal from the nuclear deal.
Trump announced on his Twitter account Saturday that Saudi Arabia's King Salman had agreed to increase oil production, a week after the Organization of the Petroleum Exporting Countries (OPEC) made a similar decision.
Trump twitted, «I just talked to Saudi King Salman and explained to him that due to the turmoil in Iran and Venezuela, I ask Saudi Arabia to increase oil production, maybe even two million barrels to compensate the market demands», adding «Prices are too high! And the King agreed».
King Salman and Trump stressed during a telephone conversation that «efforts should be made to maintain the stability of oil markets, the growth of the global economy and the efforts of producing countries to compensate for any potential shortage of supplies», as white house statement said.
Trump has repeatedly denounced OPEC in recent months as pressure on Riyadh, Washington's main ally, has intensified to boost production in the hope of cutting oil prices ahead of mid-term elections in November.
The announcement came a week after ministers from OPEC, Saudi Arabia's main member, agreed to raise production by about 1 million barrel per day starting from July.
Russia, which is not part of OPEC, on June 23 backed efforts that ended a week of tense diplomacy and managed to avoid a dispute that would damage the bloc between Tehran and Riyadh.
The Saudi Energy Minister Khalid Al Falih said that", I think this will contribute significantly to meeting the additional demand we expect in the second half of the year".
The talks focused on the issue of amending an agreement signed 18 months ago between OPEC members and their allies, including Russia, which ended the global oil boom and raised crude prices.
Saudi Arabia, backed by Russia, has been pushing hard for higher production as complaints from key consumer nations such as the United States, India and China on rising prices have raised.
Tehran, for its part, has opposed introducing any changes to the output reduction agreement at a time when Iran's oil sector is facing new sanctions against Trump's decision to withdraw from the nuclear deal.
Trump was accused of trying to politicize OPEC and noted that US sanctions against Iran and Venezuela had helped lift prices.
On Tuesday, the United States urged its allies to cut oil imports from Iran to zero as part of the US sanctions package after it withdrew from the Iranian nuclear deal.
A State Department official said «all countries should either stop importing oil from Iran by November 4 or face sanctions».
«We’ll isolate Iran's funding sources and look forward to highlighting Iran's malicious behavior».
Trump's comments came after OPEC and its producers announced an increase in oil production from early July to maintain market supplies.
«Aramco is currently producing 10 million barrels per day of oil and has the capacity to produce 12 million», said Amine Al Nasser, chief executive of state-owned oil giant Saudi Aramco.
OPEC members began in early 2017 to implement the agreement to cut production by 1.2 million barrels, plus 600 thousand barrels of independent producers, bringing the total agreed reduction of 1.8 million barrels per day, aimed at restoring stability of the oil markets.
The agreement, which began early, last year, expires in December 2018.