Crude Oil Up 21% Year-to-date, $90 In View

Trump's Tweet on Deal With Saudi King Makes Oil Prices Plummet

Trump's Tweet on Deal With Saudi King Makes Oil Prices Plummet

Amid reports Saudi Arabia's oil output for June is at near-record levels, President Trump tweeted Saturday that Saudi King Salman "agreed" in a phone conversation to increase oil production to roll back oil prices.

U.S. President Donald Trump has faulted the rising global oil prices, calling on Saudi Arabia to jerk up production to crash the high prices.

Last week, the Organization of the Petroleum Exporting Countries led by Saudi Arabia and its allies including Russian Federation agreed to boost oil supplies. Demand for oil has overtaken supply because of production shortages in Libya and Venezuela.

Trump's comments come as oil prices have edged higher as his administration pushes US allies to end oil purchases from Iran.

Japanese refiners are ramping up purchases of USA crude as it becomes cheaper relative to their usual Middle East supplies and are assessing heavy grades from US shale production as a replacement for supplies from Iran, industry sources said.

As the summer driving season moves into high gear, retail gasoline prices have been as high as $2.96 a gallon, according to the Energy Information Administration. A steep rise in USA output has since widened the price gap between the two benchmarks to more than $5 a barrel, making US oil more attractive.

Officials didn't immediately respond to a request for comment. If so, such a boost would be significant for the country's oil production, which hit 10.03 million barrels per day (bpd) in May.

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"The two leaders agreed that balancing the global oil market is essential to ensure access to reliable and affordable energy to people everywhere", it said.

Continuing increases came despite the decision last week by OPEC and its allies to increase production by as much as 1 million barrels per day. Trump's tweet offered no timeframe for the additional 2 million barrels - whether that meant per day or per month.

While a final view on the USA asking India and China to cut Iranian oil imports has not yet been taken, the Petroleum Ministry has asked refiners to tread cautiously and start looking at alternatives. Saudi Energy Minister Khalid Al-Falih indicated the group's action would add almost one million barrels a day to the market.

The US state department has claimed that it expects the "vast majority" of world nations will comply with Washington's demand to boycott Iran's oil.

During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked due to the European and USA sanctions. South Korea accounted for 14 percent of Iran's oil exports a year ago, according to the U.S. Energy Department.

India's oil ministry held a meeting with refiners on Thursday (June 28), urging them to scout for alternatives to Iranian oil, the sources said.

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