OPEC says it's doing best to supply market but won't overdo it

Marco Green
July 11, 2018

Iran on Saturday accused US President Donald Trump of destabilising the oil market with his flurry of tweets taking aim at the OPEC cartel.

"We are working to minimize disruptions to the global market, but we are confident that there is sufficient global spare oil production capacity", Brian Hook, the director of policy planning, said on July 2.

According to the top official, the order issued by the U.S. leader is "a great insult to [OPEC] governments and nations, and destabilizes the market".

There have been reports that Saudi Arabia has boosted its oil production by nearly half a million bpd in June, and the UAE has spare capacity of between 400,000 and 600,000 bpd, Al-Mazrouei said, adding that OPEC as a whole has enough spare capacity to offset any shortage.

Hossein Kazempour Ardebili, Iran's ambassador to the OPEC, said the strong rhetoric by Trump against OPEC and oil producers could soon push up crude prices to as high as 100 USA dollars per barrel. This must be a two way street.

Iran has threatened to block oil exports through a key Gulf waterway in retaliation for United States efforts to reduce Iranian oil sales to zero.

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The United States in May said it was walking away from the 2015 nuclear deal between Tehran and world powers.

Iran, OPEC's third-largest producer, is facing U.S. sanctions on its oil exports that are prompting some buyers to cut purchases.

Money managers raised their bullish bets on U.S. crude in the week to July 3, the U.S. Commodity Trading Commission said on Monday.

He further added that Iran has always been an open market to India be it for petroleum, urea or other areas of energy cooperation and Iran has always understood what India needed.

Now, President Trump is threatening sanctions against any country that continues to do business with Iran.

Iran, the fourth-largest oil producer, accounts for five per cent of global oil supply and cutting its exports to zero could push oil up by $50 barrels per day (bpd) if Saudi cannot keep up, said analysts at BofA Merrill Lynch Global Research. The US has directed all countries to stop all their oil imports from Iran by November 4 in a bid to isolate Iran's funding channels.

South Korea has bought almost 296,000 barrels of oil from Iran in the first five months of the Iranian calendar year (starting on March 21), and is the biggest buyer of Iranian oil after China and India.

Other reports by Click Lancashire

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