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Home / Business / Trump asks Saudi Arabia to pump more oil and cites high prices

Trump asks Saudi Arabia to pump more oil and cites high prices



U.S. president

Donald Trump

He urged Saudi Arabia to significantly boost its oil production and increase pressure on Riyadh to ease rapidly rising crude oil prices.

The intervention comes down as global demand increases, stocks of oil fall and a number of supply disruptions – in Canada, Libya, Venezuela and Iran – have significantly streamlined markets.

The oil price closed on Friday with another high of several years. The US benchmark crude closed just over US $ 74 per barrel, the highest level since November 201

4. Brent, the global benchmark, stands at just under $ 80 a barrel.

This has contributed to rising pump prices just prior to US midterm elections. Mr. Trump has targeted the organization of oil exporting countries in recent months and blamed the higher prices for it.

Saudi Arabia, the de facto head of OPEC, and Russia have already announced that they will work together to boost production. Growers generate more revenue at high prices, but are also aware that if they get too high, they will slow down economic growth and demand for oil. OPEC has also said that it has heard complaints from large consuming nations such as the US.

In the public eye, Riyadh has promised modest increases in production, but behind the scenes, the kingdom is rising rapidly – from just over 10 million barrels a year. V3.espacenet.com/textdoc? html A few months ago, the target of almost 11 million barrels a day in July is said to have been reached. Trump said in a tweet on Saturday that he would demand even more, a request that oil officials inside and outside the kingdom would say is difficult for Saudi Arabia to meet sustainably.

"I demand that Saudi Arabia increase the price of oil production, perhaps up to 2,000,000 barrels," said Mr. Trump in the tweet, citing a conversation with the Saudi King Salman.

"Prices up [sic] high! He has agreed!" Tweet said calling "disturbances and disturbances" in Iran and in Venezuela. It was not clear if Mr Trump said the king agreed that the prices were too high or that the kingdom would increase oil production.

Production in Venezuela fell sharply in the economic crisis there. The US has resumed sanctions on Iran, and earlier this week they said they were calling on buyers of Iranian crude to stop their purchases by November, much sooner than expected.

The oil price began to fall in recent weeks Saudi-Russian agreement to pump oil. But they started climbing fast again this week.

The prices at the pump have a long history as a topic before the elections in the US. The Republicans are trying in November to hold the majority in both chambers of Congress.

Democrats have tried to use the subject. May Day Memorial Day, Minority Leader of the Senate

Chuck Schumer

(D., N.Y.) appeared at an Exxon Mobil Corp. filling station in Washington, D.C., accusing Mr. Trump of high gas prices. "Why does not he urge her to lower her prices so that prices at the pump can be lower?" He said.

Saudi Arabia said in an official statement by the state news agency Saudi Arabia that King Salman spoke to Mr. Trump, but did not mention the two million barrels of additional production that the American leader tweeted about.

"During the call, the two leaders emphasized the need to make efforts to maintain the stability of the oil markets and the growth of the global economy," it said.

Saudi Arabia, while a close American ally, has long been cautious, seems to seem to be responding to specific requests to pump oil. It states that it balances the markets and does not keep prices too high or too low. It is also eager to appear that it is acting in coordination with OPEC.

Iran, an OPEC member, has accused Riyadh of fulfilling Washington's requests. The Iranian OPEC governor told Bloomberg on Saturday that Mr. Trump urged Saudi Arabia to "withdraw from OPEC."

Last week, OPEC and a group of non-OPEC producers led by Russia agreed on a pact of 2016 limited production. They agreed that, according to people who are familiar with the matter, about 600,000 barrels of oil per day would start.

Most of this increase should come from Saudi Arabia, which is almost all over the world with spare capacity that can turn it on fast. It says it holds between 1.5 million barrels and 2 million barrels of free capacity at all times.

His ability to deliver this in a sustainable manner has long been controversial, according to officials and outsiders.

People familiar with the matter have previously said that the kingdom can sustain production of just 12.5 million barrels a day for a very short time.

"Saudi Arabia does not really like more than 11 million barrels a day and does not intend to expand its current production capacity, it's expensive," said another Saudi official.

Write to Summer Said at summer.said@wsj.com, Mark H. Anderson at mark.anderson@wsj.com, and Peter Nicholas at peter.nicholas@wsj.com


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