In a letter to United Arab Emirates Energy Minister and OPEC President Suhail Mohamed al-Mazrouei, Iran's Oil Minister Bijan Zanganeh said: "OPEC decisions by no means warrant any action by some of its member countries in pursuit of the call for production increase by USA, politically motivated against Iran". S. defends many of their members for very little dollars.
"This must be a two-way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"
The world's biggest crude exporter is preparing to ramp up oil production, possibly by as much as two million barrels per day, amid USA sanctions on Iran. However, summer months in the US usually lead to increased demand for oil, boosting the price of gasoline in a midterm election year.
For starters, Trump's reimposition of sanctions on Iran after canceling President Barack Obama's nuclear deal with that country has put upward pressure on the commodity, according to Mizuho Securities oil analyst Paul Sankey. "Please stop using this method". "We are telling relevant markets and countries, which will purchase our oil, that we will buy goods in case they purchase our oil", a representative of the Iranian parliament's energy committee, Asadollah Qarekhani, was quoted by Sputnik as saying.
But while some have interpreted the Saudi move as a traditional Saudi card to always scramble to soothe American frustration and oblige to United States demands, other reports have suggested that Riyadh's move is the result of deep political calculations: step in to stabilize oil prices and compel the USA to adopt tougher measures on Iran.
Brent crude, the global benchmark, was down 19 cents at $77.20 a barrel while USA crude slipped 2 cents to $72.92.
USA crude inventories fell by 4.5 million barrels in the week to June 29 to 416.9 million barrels, according to the American Petroleum Institute (API) on Tuesday.
West Texas Intermediate crude for August delivery rose 20 cents to settle at US$74.14 a barrel on the New York Mercantile Exchange, after earlier rising to as high as US$75.27. "The UAE can increase production at a point when oil price remaining high so they will increase their market share and it is positive for economic outlook and also the fiscal positon will see a surplus this year due to higher oil revenues", she said.
At 08:23 a.m. EDT today, WTI Crude was down 0.78 percent at $72.37, and Brent Crude traded down 1.23 percent at $76.44.
The US President used his usual American foreign policy card, threatening to withdraw American support from "those countries" that are "manipulating" oil prices.
So far this year, the price of Brent crude oil, which is used as the global benchmark price, has risen by 20 percent to about $78 per barrel. Analysts and traders were predicting a draw of 1 million barrels. While Trump says he wants lower oil prices, United States sanctions against OPEC members Iran and Venezuela are adding uncertainty to the market, causing prices to spike.
"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction 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..."
Investors had questions as "to whether Saudi Arabia and Russian Federation could or would really be able to ramp production quickly enough", said Rob Haworth, who helps oversee US$151 billion at U.S. Bank Wealth Management in Seattle.