OPEC likely to cut crude supplies
ABU DHABI, United Arab Emirates — OPEC and allied oil-producing countries will likely need to cut crude supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market after U.S. sanctions on Iran failed to cut Tehran’s output, Saudi Arabia’s energy minister said yesterday.
The comments from the minister, Khalid al-Falih, show the balancing act the U.S. allies face in dealing with President Trump’s actions related to the oil industry.
Trump in recent weeks demanded the oil cartel increase production to drive down U.S. gasoline prices. “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” he tweeted yesterday.
The U.S. has meanwhile allowed some of its allies — Greece, India, Italy, Japan, South Korea, Taiwan and Turkey — as well as rival China to continue to purchase Iranian oil despite reimposed sanctions, as long as they work to reduce their imports to zero.
Al-Falih, who on Sunday said the kingdom would cut production by over 500,000 barrels per day in December, said yesterday that Saudi Arabia had been giving customers “100 percent of what they asked for.” That appeared to be a veiled reference to Trump.
Al-Falih said OPEC officials have seen analysis papers suggesting a production cut of upward of 1 million barrels of crude a day may be necessary to rebalance the market.
“There are a lot of assumptions in their projections that may change,” al-Falih said. “We don’t want to throttle the global economy.”
A gallon of regular gasoline in the U.S. on average now sells for $2.69, down from $2.90 a month ago, according to AAA. Those lower prices likely quieted Trump, but production cuts could again boost prices at the pump.