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Saudi Arabia will not boost oil export this month, official says

Thursday, 19 July 2018 11:59 PM [ Last Update: Friday, 20 July 2018 12:02 AM ]

An oil tanker is being loaded at Saudi Aramco's Ras Tanura oil refinery and oil terminal on May 21, 2018. (Photo by Reuters)

Saudi Arabia's governor to the Organization of the Petroleum Exporting Countries (OPEC) says the kingdom’s oil export will be little changed this month, dealing a setback to US President Donald Trump who had pinned hopes on Saudis to reduce oil prices in global markets.

Adeeb al-Aama said in a statement on Thursday that the kingdom’s July crude oil exports will be roughly in line with last month's total, which stood at nearly 500,000 barrels per day (bpd).

He added that Saudi Arabia’s total supplies to the market are poised to drop by 100,000 bpd in August compared with July.

Aama further noted that Saudi Arabia will not substantially oversupply the market, dismissing concerns over an oil glut as baseless.

He asserted that Riyadh “does not try to push oil” into the market beyond customer needs.

“It seems that Saudi Arabia will not pump more and that has the price moving higher,” Greg Michalowski, an analyst at ForexLive, said.

Last month, the White House said in a statement that Saudi Arabia's King Salman bin Abdulaziz Al Saud had promised Trump that he could raise oil production if needed, and that the country had two million bpd of spare capacity.

Saudi Arabia's King Salman bin Abdulaziz Al Saud talks during the opening of 29th Arab Summit in Dhahran, Saudi Arabia, on April 15, 2018. (Photo by Reuters)

The incumbent US administration has lobbied Saudi Arabia to increase output in order to offset the impact of its sanctions on the oil industries of Iran and Venezuela – two of the world's main crude oil producers.

OPEC, Russia and a number of other producer nations have been working together since January 2017 to end a period of oversupply that saw oil prices drop to 12-year lows in 2016.

Iran’s OPEC governor, Hossein Kazempour Ardebili, has accused the United States and Saudi Arabia of trying to raise oil prices, saying both countries are acting against the foundation of OPEC.

“If this happens, (it) means Trump is asking Saudi Arabia to walk (away) from OPEC,” he told Reuters.

“The market will go up to $100 I am sure as Saudi Arabia said they will plan an increase for July. ... This was managed between the two to rob the pocket of rest of the world,” Kazempour Ardebili said.

Tehran doubts that Saudi Arabia could add enough oil to compensate possible shortfalls in case Trump tightens sanctions, the top Iranian energy official highlighted.

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