Trump says Saudi Arabia has agreed to increase oil production

Crude Oil

Crude Oil

Trump implied on Twitter that he had asked the king in a phone call to increase oil production in hopes of greater supply bringing costs down in the United States, writing 'Prices [are too] high!' Prices to [o] high!

Although Europe said it would stand by the nuclear deal, European purchases of Iranian oil are falling due to concerns about possible retaliations from the US.

The decision follows a meeting of oil ministers from around the globe at the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, where they decided on a production increase in order to keep prices low.

But in a statement Saturday evening, the White House said King Salman bin Abdulaziz affirmed that Saudi Arabia has two million barrels a day of spare production capacity "which it will prudently use if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality".

"I guess the Saudis want to give the confidence to Trump to go very hardcore on Iran", tweeted the oil market's most vocal bull, commodities hedge-fund manager Pierre Andurand. OPEC and Russian Federation reached a complicated agreement during the talks, with OPEC agreeing to pump more oil - but perhaps not as much as some had expected.

Total's position illustrates the immediate danger to Iran's crude exports, but also the long-term damage they could inflict on the country's oil and gas industry.

Unplanned supply disruptions from Libya to Venezuela further tightened the market.

It was not immediately clear what level of production Trump was referring to or by when.

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Oil prices rose last week after the United States announced plans to tighten sanctions on Iran - a major oil producer.

That agreement sought to curb Tehran's nuclear capabilities in exchange for the lifting of some sanctions.

The US government wants to stop Tehran exporting oil to cut off a vital supply of finance, and hopes other big oil producers in oil cartel Opec and Russian Federation will make up for the deficit.

Iran's position in the oil market is looking weaker than ever as a bruising Opec meeting and tightening net of U.S. sanctions leave it with fewer friends and fleeing customers.

"We believe that Saudi Arabia will particularly increase output over the summer to meet its seasonally higher demand and bring Opec production to the target level".

It's not clear the US will achieve a full halt, since even American allies are displeased with its unilateral abandonment of the deal that curbed Iran's nuclear program.

Iran's Supreme Leader Ayatollah Ali Khamenei on Saturday accused Washington of trying to turn Iranians against their government. "This was managed between the two to rob the pocket of rest of the world", he said.

Kuwait will increase its oil production by 85,000 barrels per day (bpd) Sunday, as part of a broader OPEC agreement to raise production by one million bpd, according to energy Minister Bakhit al-Rashidi.

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