Less than two months after Khalid al-Falih's assurances that Saudi Arabia will produce and export enough oil to keep prices steady, the Kingdom's Energy Minister has said that exports would be cut by as much as 500,000 bpd this month and next on a bid to prop up prices. The oil producers could agree (though Russian Federation doesn't want to) to reduce the output to somewhere between the May and October figure (say a cut of up to 1 million) - cutting all the way to May level may attract the wrath of Donald Trump.
OPEC's crude production rose by 127,000 barrels a day in October, according to outside estimates compiled by the group.
The U.S. has meanwhile allowed some of its allies - Greece, India, Italy, Japan, South Korea, Taiwan and Turkey - as well as rival China to continue to purchase Iranian oil despite re-imposed sanctions, as long as they work to reduce their imports to zero.
Benchmark Brent crude, which had been trading above $80 a barrel recently, now hovers just over $70 after the US sanction waivers on Iran. The cut represents a reduction in global oil supply of about 0.5 percent.
Any formal decision on production cuts by Opec would likely come at its next meeting, in Vienna on 6 December. The biggest increases were from the United Arab Emirates and Saudi Arabia, while Iranian supply continued to tumble.
That lifted Brent crude, the global benchmark, to $70.70 per barrel yesterday. So, we know that supply is going to be reduced and in the medium term we can expect higher oil prices.
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The two countries have also clashed over the October killing of US -based journalist Jamal Khashoggi at the Saudi consulate in Istanbul, with the Trump administration reportedly considering sanctions on some Saudi officials in response. "The committee reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements", it said in a statement. Iraq has successfully boosted production to a record, and its more fragile economy may make it loathe to reverse course.
US President Donald Trump, however, did not like the rhetoric coming from his political ally in Saudi Arabia.
"The sanctions on Iran have turned out to be a damp squib for the time being with the Trump administration granting exemptions", said Devesh Mamtani, head of investments and advisory at Century Financial, a brokerage firm in Dubai.
"I think we would have to wait and see how the market is unfolding because our ultimate goal is market stability". It's a concern shared by Barkindo, who said Monday that the market balance is under threat from surplus supply and dwindling demand.
Trump risks testing Saudi patience - or even provoking the kingdom's ire - at a particularly vulnerable moment, with the US decision to reimpose sanctions on Iran threatening to increase prices.