The US-led sanctions are aimed at pressuring Iran to negotiate a follow-up agreement to halt its nuclear programme, following Trump's withdrawl from a 2015 nuclear deal agreed between Iran and six major powers.
King Salman briefed the cabinet on the telephone call he had received from President Donald Trump during which the two leaders confirmed the need to exert efforts to maintain the stability of oil markets and the growth of the world economy.
They agreed to bring down over compliance with the cuts, resulting in an output increase of one million barrels a day, according to the Saudi energy ministry.
"They seek to push Iranian exports of crude, condensate, and oil products to zero", energy consultancy FGE said in a note.
OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up the market.
Brent crude oil fell to $77.82 a barrel on Monday, a drop of $1.41, while WTI dropped by 43 cents to $73.72 as of 4:42 p.m. GMT.
Overall, however, analysts said OPEC's production policy as well as unplanned supply disruptions were now the main price drivers.
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The clash over OPEC policy and the resumption of US sanctions on Iran has been amplified this week as Trump continues to target the group which he blames for rising prices. Adnoc, as the company is known, can pump as much as 3.3 million barrels of crude a day and will increase output capacity to 3.5 million barrels daily by the end of the year.
An agency report on Tuesday indicated, however, that despite the U.S. push on Saudi Arabia, futures in NY jumped as much as 1.7 per cent.
"A fall in the price per barrel won't serve the interests of the big oil producers", Kaddour stressed.
Trump was referring to OPEC's decision to raise output together with its non-OPEC allies by around 1 million barrels per day, although since then Saudi Arabia has pledged to raise production to a new record. With oil prices rising ahead of US November midterm elections, Mr Trump has tweeted his frustration three times to no avail. He also said he and senior Treasury Department officials would visit Gulf states "in the coming days".
China is the largest importer of Iranian oil with 24 percent, followed by India with 18 percent. "We are also working with oil market participants, including producers and consumers, to ensure market stability".
He added that it is "incorrect and unwise" to think that "one day all oil producing countries would export their surplus oil and Iran would be the only country that can not export its oil".
"Even if Saudi Arabia does provide much of the oil to replace any shortcomings from Iran or Libya or Venezuela, that has the market concerned that we will be hitting fairly low levels of spare capacity, " said Bart Melek, head of global commodity strategy at TD Securities in Toronto.