Saudis will pump up oil production, says Trump

President Donald Trump has asked Saudi Arabia's king to increase oil production to make up for a shortfall from Iran and Venezuela. It produces around 10 million barrels of crude per day, according to OPEC. In reality, the output increase isn't expected to exceed 700,000 barrels per day because some members are already pumping at maximum capacity.

"During the call, the two leaders stressed the need to make efforts to maintain the stability of oil markets and the growth of the global economy", said the statement as quoted in the report. Saudi oil officials did not immediately comment. Expectations that this production increase won't be enough to stabilize these inventory levels are the primary driver behind last week's oil price surge.

The administration has threatened key allies such as South Korea with sanctions if they do not cut off Iranian imports by early November.

"All the potential shortfalls could outstrip the production increase agreed to by OPEC and Russian Federation", said Dominick Chirichella, Director of Risk Management at EMI DTN.

Saudi King Salman speaks during a meeting of the Saudi-Iraqi Bilateral Coordination Council in Riyadh on October 22, 2017.

Kuwait planned to raise oil output by 85,000 barrels per day starting on Sunday, part of an agreement between OPEC and non-OPEC producers to increase production by one million bpd, its Energy Minister Bakhit al-Rashidi said on Saturday. Trump ordered the re-imposition of USA sanctions against Iran that were suspended under the accord. Saudi Arabia acknowledged the call took place, but mentioned no production targets.

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.

Saudi Arabia regulates its oil production in agreement with other members of the Organization of Petroleum Exporting Countries. At meetings in Vienna on June 22-23, Opec and its allies cobbled together a delicate accord in order to satisfy some producers who wanted to limit output and others like the Saudis, which sought to ease away from the supply cuts.

Benchmark Brent crude LCOc1 was around $79 a barrel on Friday and a Reuters poll showed prices look to remain strong for the rest of this year due to supply disruptions in countries including Libya and Venezuela and the extra oil from OPEC fails to meet rising demand.

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Oil prices increased Friday as US sanctions against Iran threatened to remove a substantial volume of crude oil from world markets at a time of rising global demand.

Saudi Energy Minister Khalid al-Falih met with U.S. Secretary of State Mike Pompeo in Washington on Thursday to discuss energy security.

USA officials are pressing allies in Europe, Asia and the Middle East, including Saudi Arabia, to adhere to the sanctions, which are aimed at pressuring Iran to negotiate a follow-up agreement to halt its nuclear programmes. "Triple-digit oil prices are not off the table", JBC said.

The oil markets were also shaken last week when a senior State Department official said that the United States would ask countries to reduce their purchases of Iranian oil to "zero".

Non-OPEC member Russian Federation on June 23 also backed the effort, capping a week of tense diplomacy for the grouping that averted a damaging rift between arch foes Iran and Saudi Arabia.

Meanwhile, Iran's Supreme Leader Ayatollah Ali Khamenei on Saturday accused the U.S. of trying to turn Iranians against their government.

Iran's rial currency has lost up to 40 per cent of its value since last month, when Trump pulled out of the nuclear deal.

"The market will go up to $100 I am sure as Saudi Arabia said they will plan an increase for July ..."

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