Published: Mon, September 24, 2018
Finance | By Loren Pratt

Saudi Arabia rejects Trump request to hike oil output

Saudi Arabia rejects Trump request to hike oil output

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, as well as top producer Russian Federation, are discussing raising output by 500,000 bpd to counter falling supply from Iran, although the discussions are not finalised.

OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday ruled out any immediate extra increase in output, effectively rebuffing a call by U.S. President Donald Trump for action to cool the market. It also encouraged "countries with spare capacity to work with customers to meet their demand during the remaining months of 2018".

Zanganeh was referring to a tweet by Trump in which he linked US support for Middle Eastern countries to oil prices on Thursday and again urged OPEC to lower prices.

Oil prices rose 2 percent on Monday as US sanctions restricted Iranian crude exports, tightening global supply, with some traders forecasting a spike in crude to as much as $100 per barrel. Output fell below those targets this year, and in June the same countries agreed to boost the oil supply.

"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!"

Saudi Arabia Energy Minister Khalid al-Falih told reporters that participating countries have provided over the last three months "a lot of supply to offset decreases" in Iran, Venezuela and Mexico.

Non-member production overall is forecast to rise by 8.6 mbd to 66.1 mbd by 2023 on higher global demand, the report added, but a relative tapering off from 2020 will see cartel members' crude production shrug off a medium-term trend fall, OPEC predicted.

Amid a tightening market, U.S. commercial crude oil inventories are at their lowest level since early 2015.

The body said demand would continue rising despite electric-powered vehicles taking an increasing market share and political moves to champion renewable energy.

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