Monday, August 20, 2018
News

Trump, Iran spar over oil prices ahead of OPEC meeting

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

By Susan Heavey and Alex LawlerWASHINGTON/LONDON | Wednesday, Jun 13 2018 IST
U.S. President Donald Trump and Iran exchanged sharp words over oil prices on Wednesday, with Trump blaming OPEC for high oil prices and Tehran accusing him of stoking volatility after he withdrew last month from a global nuclear arms deal with Iran.

Trump sparked the latest back-and-forth when he renewed his attack on OPEC in a tweet that said oil prices are too high and that the cartel was "at it again."Oil prices have risen by around 60 percent over the last year after the Organization of the Petroleum Exporting Countries and some non-OPEC producers including Russia started reducing supplies in 2017. The cartel meets June 22-23 in Vienna, and producers are seen as likely to raise production, perhaps before the limits are due to sunset at year-end.

Iran's OPEC governor, Hossein Kazempour Ardebili, fired back quickly at Trump's words. "You cannot place sanctions on two OPEC founder members and still blame OPEC for oil price volatility," he said in a statement to Reuters, referring to itself and Venezuela.

The oil supply deal is set to continue through the end of 2018, but plans for its continuation were unclear. The calculus changed after Trump announced in May that the United States was pulling out of the 2015 deal that restricted Iran's nuclear program in exchange for the removal of sanctions.

The U.S. move has put pressure on European and Asian clients to stop importing Iranian oil or doing business with the country.

Saudi Arabia, Iran's rival and the largest producer in OPEC, and Russia, the world's largest producer and a party to the deal, have already increased supply.

Saudi production rose to 10.03 million bpd in May, in line with deal quotas, according to OPEC data. Russia's production was 11.1 million barrels a day in the beginning of June, exceeding its quota, according to sources familiar with the matter.

The price of Brent crude peaked in May at $80.50 a barrel, then pulled back, trading on Wednesday near $76 at barrel, partly in anticipation that the deal may end.

"Oil prices are too high, OPEC is at it again. Not good!" Trump wrote in a post on Twitter on Wednesday after last raising the issue in April.

The potential for OPEC to boost production has raised concerns about the cartel's limited spare capacity, which could fall to as low as 2 million bpd. This would make it harder to respond to a supply shock, such as out of Venezuela, where output has declined to a 33-year-low due to an economic crisis.

"OPEC has the lowest spare capacity ever right now," said fund manager Pierre Andurand, in a tweeted response to Trump. "There is going to be a real issue," he wrote, predicting prices above $150 per barrel within two years.

In the United States, gasoline pump prices nationwide have risen to near $3 a gallon during peak summer travel season, still less than the $4 a gallon during the 2007-2009 Great Recession. Gasoline demand has remained strong, rising to an estimated 9.9 million bpd as of last week, according to U.S. Energy Department data.

Trump sent out his tweet hours after returning to Washington from a summit with North Korean leader Kim Jong Un in Singapore and it was not immediately clear what prompted his comment.

REUTERS RJ 2114

-- (Reuters) -- C-1-1-DL0098-1401886.Xml

Loading...
 
  LATEST COMMENTS (0)
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
TRENDING TOPICS
 
 
 
CITY NEWS
MORE CITIES
 
MORE WORLD NEWS
Trump once again compares Russia probe t...
Saudi Arabia warns possible floods in Me...
Fake accounts case: IHC grants protectiv...
Israel shuts Gaza crossing following vio...
Magnitude 8.2 quake strikes in the Pacif...
UK hopes to pick up Brexit talks pace wi...
More...
 
INDIA WORLD ASIA
Man arrested for killing friend, his mot...
England bundle out India for 329 in firs...
846,680 people in relief camps: Kerala C...
GDP back series data unofficial estimate...
Illustrations on vintage postcards, lett...
Kerala diaspora in Middle East helps flo...
More...    
 
 Top Stories
Kim Kardashian shows off curves in ... 
Saudi Arabia warns possible floods ... 
Trump once again compares Russia pr... 
Little Mix singer's strong message ... 
Kajol to go back to college with 'H... 
Pakistan welcomes Afghanistan's cea... 
30-year-old man dies of mysterious ... 
SP workers should come forward to h...