OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, ruled out any immediate, additional increase in crude output, effectively rebuffing US President Donald Trump’s calls for action to cool the market, Reuters reports.
“I do not influence prices,” Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.
Benchmark Brent oil LCOc1 reached US$80 a barrel this month, prompting Trump to reiterate on Thursday his demand that the Organization of the Petroleum Exporting Countries lower prices.
The price rally mainly stemmed from a decline in oil exports from OPEC member Iran due to fresh US sanctions.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!” Trump wrote on Twitter.
Falih said Saudi Arabia had spare capacity to raise output but such a move was not required at the moment and might not be needed next year as, according to OPEC’s projections, a stellar rise in non-OPEC production could exceed global demand growth.
“The markets are adequately supplied. I don’t know of any refiner in the world who is looking for oil and is not able to get it,” Falih said, adding that Saudi Arabia could raise output by up to 1.5 million barrels per day (bpd) if needed.
“Given the numbers we saw today, that [an output increase in 2019] is highly unlikely unless we have surprises on the supply and demand,” Falih added.
The statement from Trump, meanwhile, was not his first criticism of OPEC.
Higher gasoline prices for US consumers could create a political headache for Republican Trump before mid-term congressional elections in November.
Iran, OPEC’s third-largest producer, has accused Trump of orchestrating the oil price rally by imposing sanctions on Tehran and accused its regional arch-rival Saudi Arabia of bowing to US pressure.
On Sunday, Iranian Oil Minister Bijan Zanganeh said Trump’s tweet “was the biggest insult to Washington’s allies in the Middle East”.
Non-OPEC supply to rise
A mid-term report released by OPEC on Sunday forecast that non-OPEC supply from countries led by the United States would rise by 2.4 million bpd in 2019 while global oil demand should grow by just 1.5 million.
It also steeply raised US oil output growth estimates to 2023, predicting OPEC would lose further market share.
“The US remains by far the most important source of medium-term supply growth, contributing … two-thirds of new supply, driven by surging tight oil output,” it said.
The US has pushed oil output to record levels in recent years on the back of a shale revolution that allowed new technology to unlock reserves previously seen as uneconomic.
US sanctions on OPEC members Venezuela and Iran have helped pushed oil prices LCOc1 to their highest since 2014 at around $80 a barrel, also spurring US producers to ramp up output.
OPEC said the US will increase tight oil production to 13.4 million bpd in 2023 from 7.4 million bpd in 2017, with total US output reaching 20 million bpd.
That would make the US, once the largest crude importer, self-sufficient in oil.
– Contact us at [email protected]