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Saudi Arabia’s Crown Prince said that the Kingdom is fulfilling promises to make up for Iranian Crude Oil supplies lost to American sanctions.
“The request that America made to Saudi Arabia and other OPEC countries is to be sure that if there is any loss of supply from Iran, that we will supply that,” Mohammed Bin Salman, heir to the Saudi throne, said. “And that happened.”
But, US President Donald Trump continues to attack the Organization of Petroleum Exporting Countries (OPEC) for letting prices rally while he seeks to choke off supplies from Iran, a political antagonist of the Saudis.
The Saudis’ efforts have also failed to prevent Crude Oil hitting a 4-year high above 86 bbl in London on the week. This is action brought on by traders in the energy sector.
Crude Oil traders are concerned that the Kingdom is not ramping up quickly enough, and that it may not have enough capacity to fully cover Iran’s losses.
Yet a coalition of producers from OPEC and beyond has recently boosted output by 1.5-M BPD, 2X the 700,000-bbl decline suffered so far by Iran, according to the Crown Prince.
“We export as much as two barrels for any barrel that disappeared from Iran recently,” Prince Mohammed said. “So we did our job and more.”
Saudi Arabia is now pumping about 10.7-M BPD, and can add a further 1.3-M bbl “if the market needs that,” the Prince said. However, many analysts doubt that 12 million barrels a day can be reached quickly, or maintained for an extended frame.
Prince Mohammed said that the Kingdom could push capacity beyond 12-M BPD with additional investment, and that extra supplies are also available from Saudi Arabia’s allies. The OPEC+ coalition spans other GCC producers like the United Arab Emirates, as well as countries outside OPEC such as Russia.
President Trump is reimposing sanctions on Iran after quitting an agreement on the country’s nuclear program, and the measures will take full effect in November.
Saudi Arabia and Iran are both members of OPEC, yet they are bitterly opposed on political issues and continue to clash in conflicts across the Middle East from Syria to Yemen. That activity has been curtailed and may soon come to an end.
Have a terrific weekend.
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