Saudi Arabia’s Crown Prince Mohammed bin Salman responded to U.S. demands that the kingdom make up for lost Iranian crude supplies and tame rising oil prices, saying that they have already done so.
“The request that America made to Saudi Arabia and other OPEC countries is to be sure that if there is any loss of supply from Iran, that we will supply that,” Mohammed Bin Salman, heir to the Saudi throne, said in an interview. “And that happened.”
However, President Donald Trump seems to have ignored the action and continues to blast the Organization of Petroleum Exporting Countries (OPEC) for letting prices soar. Last week, the State Department called on the oil cartel to tap its reserve supplies, Bloomberg writes.
At the same time, Trump insists on keeping sanctions on Iran in place, thus choking off supply from the middle eastern country, which has driven prices to a four-year high above $86 a barrel. And despite Saudi Arabia’s best efforts to ramp up production, oil traders worry that the kingdom is not doing so quickly enough and that it lacks the capacity to cover Iran’s losses.
However, the crown prince maintained that OPEC and non-OPEC countries have recently boosted output by 1.5 million barrels a day, double the 700,000-barrel decline suffered so far by Iran. “We export as much as two barrels for any barrel that disappeared from Iran recently. So, we did our job and more,” he pointed out.
Prince Mohammed further claimed that the kingdom can increase its 10.7 million barrel a day production to 12 million if necessary, but analysts appear skeptical about the kingdom’s ability to maintain it for an extended period of time.
“Near-term spare capacity is effectively maxed out,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd.
The crown prince also noted that extra supplies are available from the kingdom’s allies and added that the rise of oil prices is due to losses suffered by other nations, not so much by U.S. sanctions on Iran.
“The higher price that we have in the last month, it’s not because of Iran,” he said. “It’s mostly because of things happening in Canada and Mexico, Libya, Venezuela and other countries.”
President Trump is re-imposing sanctions on the Islamic republic, although a report suggests that the United States is actively considering sanctions waivers for countries that are reducing their imports of Iranian oil.
The Trump administration’s aim is to get oil imports by Iran’s customers to zero, ideally before the November midterm elections but the administration is “prepared to work with countries that are reducing their imports on a case-by-case basis,” said a government official on condition of anonymity.