White House claims Saudi may boost oil production

Statement rows back on Trump tweet and dilutes claim of definite agreement

WASHINGTON/RIYADH — The leader of Saudi Arabia promised US President Donald Trump that he can raise oil production if needed and the country has 2 million barrels per day of spare capacity, the White House said on Saturday, rowing back on an earlier Trump tweet that appeared to suggest the Saudis had agreed to boost output by that amount.

Trump told King Salman bin Abdulaziz al-Saud that the oil market could need more supply when the men spoke on Friday, the White House said. The Saudi leader said he was ready to raise output if needed, the White House said in a statement.

“King Salman affirmed that the Kingdom maintains a 2 million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance,” read the statement.

However, a source familiar with Saudi Arabia’s production plans told Reuters earlier in the week of the kingdom’s intention to increase output by 200,000 bpd this month.

Saudi Arabia along with other Organization of Petroleum Exporting Countries and non-OPEC nations, including Russia, had agreed on June 22 to boost production by a combined 700,000 to 1 million barrels a day, so any 2 million bpd-increase would be at least double market expectations.

The White House statement undercut a tweet by Trump earlier in the day when he wrote that Saudi Arabia had definitely agreed to produce more oil.

“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & dysfunction 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 ... Prices to high! He has agreed!” Trump tweeted.

In the tweet, Trump said the extra Saudi oil would help offset a decline in supply from Iran, after the United States pulled out of the Iran nuclear deal in May and moved to reimpose oil sanctions.

Saudi state media reported that during the call, the Saudi king and Trump emphasized the need to preserve oil market stability and efforts of oil-producing countries to compensate for any potential shortage.

The statement reported by Saudi media did not mention any intention by Saudi Arabia to raise production by 2 million bpd. Saudi oil officials did not comment.

But oil officials cited by The Wall Street Journal said it is debatable whether the kingdom would be able to raise output by the amount Trump suggested.

“This is just simply not doable,” said one senior Saudi oil official cited by the Journal.

Trump has repeatedly lashed out at OPEC on Twitter in recent months, piling pressure on Riyadh, a major ally, to boost output as he hopes for lower pump prices before midterm congressional elections in November.

His latest comments come a week after ministers from the Organization of the Petroleum Exporting Countries — of which Saudi Arabia is the major member — agreed to raise output from July.