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Oil production cuts may be necessary

November 12, 2018

ABU DHABI, United Arab Emirates (AP) -- 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 Monday.

 

The comments from the minister, Khalid al-Falih, show the balancing act the U.S. allies face in dealing with President Donald 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 Monday.

 

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 re-imposed 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 Monday that Saudi Arabia had been giving customers "100 percent of what they asked for." That appeared to be a veiled reference to Trump.

 

FULL STORY

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