Trump: Saudis agree to large oil production hike
President Trump said on Twitter Saturday morning that King Salman of Saudi Arabia has agreed to increase its oil production by as much as 2 million barrels per day "because of the turmoil and disfunction in Iran and Venezuela."
The big picture, from Axios' Ben Geman: A number of analysts have pointed out that, by publicly pressing OPEC for higher production in recent weeks and months, Trump could be seeking to gain politically from a production-increase that the cartel and Russia were slated to make anyway, because the market has tightened considerably. Elevated oil prices — and hence, higher gasoline prices than in recent years — could be politically perilous for Republicans in an election year.
Yes, but: If what Trump says is accurate, and Salman did agree to the 2 million barrels, it would be a surprising development because it goes well beyond the production hike that OPEC and Russia agreed to during careful negotiations in Vienna, which concluded June 23. Pumping that much would also erode Saudi Arabia's spare production capacity.
- Saudi Arabia released a statement on President Trump and King Salman's phone call, saying they "stressed the need to make efforts to maintain the stability of oil markets, the growth of the global economy, and the efforts of producing countries to compensate for any potential shortage of supplies."
- No specific promise was made to Trump, a Saudi official told the WSJ.
Go deeper with Ben on Trump's pyrrhic OPEC outcome.