President Trump tweeted on Saturday that he had once again adhered to Saudi Arabia, the world's largest oil exporter, to increase production by up to 2 million barrels a day.
Mr. Trump has put pressure on the Saudis and the Organization of Petroleum Exporting Countries to increase supplies through tweets and other embassies. His tweet on Saturday came when many Americans took to the streets to start an extended holiday on the fourth of July.
Brent Crude, the international benchmark, sold over $ 79 a barrel on Friday, and there are talks under certain circumstances, a return to $ 100 per barrel of oil is possible. "It's certainly easy to envision a scenario at this point where the price of oil reached $ 100 again this year," said Jason Bordoff, director of the Center for Global Energy Policy at Columbia University.
Pressure from Mr. Tump helped Saudi Arabia Russia and other manufacturers agree to gradually increase the supply at its June 22-23 meeting in Vienna by up to 1 million barrels a day. "We will do everything we can to keep the market in balance," said Saudi Energy Minister Khalid Al-Falih at the end of the meeting to journalists at OPEC Headquarters in Vienna, at whose side Russian Energy Minister Alexander Novak sat.
Since then, the Trump government has increased the ante by signaling a tough line in the closure of Iran's production. Since the lifting of sanctions in 2016, Iran has returned as an important oil supplier, selling around 2.5 million barrels a day or more than 2 percent of global supplies. Traders fear that a drastic cut in Tehran's production could lead to a shortage of supply that could push prices higher.
"If we take 2 million barrels of oil off the market, what's left in the tank?" Croft asked
Mr. Trump said in his tweet that he had asked Saudi Arabia to increase production to make up for what he called "unrest in Iran and Venezuela". But most analysts think it would be a challenge for the Saudis.
Saudi Arabia, for example, says it has 2 million barrels a day of spare capacity, but analysts are skeptical that it can easily and sustainably add more than 700,000 barrels of production per day without drilling and other work that takes time , "Once you reach that level, we're in uncharted territory," said David Fyfe, chief economist of the Gunvor Group, a large trading house. "Can you really get over it so quickly?"
Apart from the Saudis, only a handful of producers, including Kuwait, the United Arab Emirates and Iraq, are likely to be able to bring more oil to market soon. The International Energy Agency, the Paris-based group representing consumer countries, recently estimated what they called "short-term supply" from the Middle East, including Saudi Arabia, at 1.14 million barrels a day. Russia could also add 400,000 barrels a day, analysts say.
While production in the United States has risen rapidly, mainly due to the extraction of oil from shale, analysts predict that growth in the US will slow in the coming months due to the lack of sufficient pipelines to do so To transport oil to the markets.
At the same time, faction fights in Libya cause a major failure, while Venezuela's oil production, once a major producer, has fallen around. Over the past two years, it has been 1 million barrels a day, with further steep increases in the coming months Reductions will be possible.
The market does not have enough oil now. The traders fear, however, that all these problems can lead to bottlenecks. Estimates of how much spare capacity or readily available oil is available vary, but most experts find it difficult to cover a large decline in Iranian exports coupled with other defaults.
Saudi Arabia King Salman said in a statement on Saturday I have talked to Mr Trump and Heads of State have talked about the need to eliminate oil supply shortages and maintain stability in the oil markets. The statement contained no concrete numbers.
The Saudis are Iran's long-standing regional rivals, and they generally welcome the hard line that Mr. Trump is leading towards Tehran.