Algeria warns Saudi Arabia, Russia against increasing oil output

Algeria warns Saudi Arabia, Russia against increasing oil output

Algeria warns Saudi Arabia, Russia against increasing oil output

Saudi Arabia and Russia's energy ministers have discussed amendments to current compliance monitoring as they prepare to increase production under an oil deal between OPEC and non-OPEC countries, state-run Saudi Press Agency reported.

'Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction [sic] in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference...' he wrote.

Iran is looking at ways to keep exporting oil after US President Donald Trump's administration threatened to impose sanctions on Iran's business partners if they don't cut Iranian oil imports to "zero" by November 4, in an attempt to further isolate Tehran politically and economically.

In June Saudi Arabia produced crude about 10.7 million barrels per day, which is more than 700,000 barrels more than a month ago.

Oil is surging as the USA pushes allies to end imports of Iranian crude, as global supply disruptions persist and American crude inventories are already at the lowest since January.

First, the United States, because of its vulnerability to world oil prices, has to once again request that the Saudis increase production, compromising Washington's leverage while conducting foreign policy.

Iran shipped out over 2 million barrels per day of oil a year ago, with Asia taking almost three quarter of the supply and the remainder heading to Europe.

Analysts are of the view that if the United States is successful at convincing most from buying Iranian oil, outages could rise to as high as 2 million barrels per day (bpd).

The decision comes in the wake of rising price of oil in the global market due to supply issues from Iran.

While the White House later backed away from an agreement, the tweet came after oil and gasoline prices surged last week even after Saudi Arabia convinced OPEC to potentially add almost 1 million barrels a day to the market. "They can likely produce a maximum of 11 million and even that will be running their system at stress levels", Head of global oil analytics for S&P Global Gary Ross said.

"Now, we are working to minimize disruptions to the global market, but we are confident that there is sufficient global spare oil production capacity".

Oil prices fell more than 1%, but held close to three-and-a-half year peaks.

Oil briefly touched $75 a barrell on Tuesday before retreating following the news of the Saudi government decision.

An Indian official says his country, which imports 400,000 barrels per day of Iranian crude, would only recognise multi-lateral sanctions, rather than unilateral sanctions.

"Further declines in US crude oil inventories and the significant outage in Libyan oil supply are helping to keep a floor under the market", said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.

China is the largest importer of Iranian oil with 24 percent, followed by India with 18 percent.

U.S. President Donald Trump tweeted on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to pump more oil, “maybe up to 2,000,000 barrels.” The White House later walked back the comments.

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