Trump's Tweet on Deal With Saudi King Makes Oil Prices Plummet

"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction (sic) 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..."

The Kingdom, which has been pumping around 10 million barrels per day, holds the largest spare capacity in the world and is the only country that can add substantial supply to the market.

"We are prepared to work with countries that are reducing their imports on a case-by-case basis, but as with our other sanctions, we are not looking to grant waivers or licenses", Hook said, in comments that were seen as a softening of the United States' prior demands. Trump's tweet, however, mentioned no time frame for the additional 2 million barrels - whether it meant per day or per month. "Since Venezuela and Libya failed to produce, OPEC countries chose to increase their output by one million barrels to compensate", Sonatrach's CEO noted, adding: "This is why prices stand at the same level".

OPEC members agreed on June 22 to increase collective production by around one million barrels per day, in a context where oil prices have approximately doubled from a 2016 low. Trump continued, "prices too high!"

Since a State Department official first told reporters on June 26 that the USA was preparing to ask allies to cut their oil imports from Iran, the U.S. market took a hit, with USA crude jumping more than 8 percent.

The official Saudi Press Agency confirmed a phone call between Trump and Salman about oil, but mentioned no specifics and the White House later struck a more cautious tone, saying in a statement the two leaders had "reaffirmed their dedication to a healthy and stable global energy market".

The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States re-imposes sanctions against Tehran, after Trump withdrew from the 2015 nuclear deal agreed between Iran and six major powers, against the advice of allies in Europe and elsewhere. The global benchmark traded at a $5.64 premium to WTI for September. "They seek to push Iranian exports of crude, condensate, and oil products to zero", energy consultancy FGE said in a note. NY. "all eyes will be on that Cushing number".

The cabinet affirmed that the launch of the Saudi Project for Landmines Clearance in Yemen, carried out under the King Salman for Humanitarian Aid and Relief Center, is an extension of the history of the Kingdom, which has been providing aid where more than 600,000 landmines have been found, as well as 130,000 sea mines, and 40,000 mines in Marib governorate and 16,000 mines in Muen Island.

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