Trump says Saudis must compensate for drop in Iran oil supply

A group of protesters chant slogans at the main gate of old Grand Bazaar in Tehran Iran

A group of protesters chant slogans at the main gate of old Grand Bazaar in Tehran Iran

"They seek to push Iranian exports of crude, condensate, and oil products to zero", energy consultancy FGE said in a note.

Trump said in a tweet on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to produce more oil. An increase in global production would typically be expected to ease prices.

Saudi Arabia's output is also on the rise and over the past few months, production has grown by 700,000 barrels per day, according to Reuters.

Hook declined to say if the kingdom can offer that additional supply, but the USA is "working to minimize disruptions to the global market", Hook said.

One of the largest Iranian customers, Indian Oil Corporation (IOC), is ready for any scenario, and it has a wide basket of alternatives to ensure crude supplies, even if India stops importing Iran's oil completely, IOC's Chairman Sanjiv Singh told Bloomberg in an interview published on Monday.

"It would be meaningless that Iran cannot export its oil while others in the region can".

"There is a strong suspicion that geopolitical risk factors have played a significant role behind oil's aggressive appreciation", said Lukman Otunuga, research analyst at FXTM, in an email to Arab News.

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In a briefing with reporters, that official said Washington probably would not grant waivers from secondary sanctions against foreign companies that continue to do business with Iran.

Oil prices fell on Monday, reversing course from last week as supplies from Saudi Arabia and Russian Federation rose while economic growth stumbled in Asia amid escalating trade disputes with the United States.

Iran shipped out over 2 million barrels per day of oil a year ago, with Asia taking almost three quarter of the supply and the remainder heading to Europe.

The senior executive official also attached great importance to continued importation of commodities during the time of sanctions. That's led to higher prices at gasoline pumps in the United States as it heads toward midterm elections for Congress.

FXTM's Otunuga took a more bearish stance on the direction of oil prices. Members of Opec and non-Opec countries have pledged to ease production cuts.

The bank said a "medium-intensity (trade) conflict would likely reduce global economic growth by at least 0.5 per cent, "before accounting for tighter financial conditions and sentiment shocks". This could easily be worse, as the price of oil tends to be particularly sensitive to momentum trades after major swings.

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