Net U.S. crude imports rose last week by 1.4 million barrels per day. The bank said that USA efforts to block Iran from exporting oil would make it hard for OPEC to meet supply demands, forcing prices to rise. Speaking yesterday in reaction to President Trump's series of tweets about OPEC's fuel prices, the Iranian official accused the U.S president of driving oil prices up with his tweets. "Please stop this method", the oil ministry news agency quoted Kazempour Ardebili as saying. Earlier this year, the Saudi Arabian Oil Co., known commonly as Saudi Aramco, agreed to a joint research effort with the Center for Strategic and International Studies, a USA think tank.
OPEC's production limits, which were implemented and extended multiple times to help bolster prices, have contributed to oil's rise.
USA crude futures CLc1 were also down 25 cents at $73.89, not far from Tuesday's 3-1/2-year high above $75.
While trade concerns may be partly responsible for the decline, the industry was surprised to learn this week that oil stockpiles in the USA are getting larger, not smaller.
The agreed increase in production is a good political move from Saudi Arabia because it shows that it does not aim to harm the world economy or its customers, only to return to a stabilized oil market.
Historically that has been the case, and with Saudi production already at record levels, Trump's expectation that the Saudis will make up for Iran's shortfalls are not realistic. Oil output cuts by Opec and allies, including Russian Federation, since January 2017 have reduced a glut of crude.
An Iranian Revolutionary Guards commander, meanwhile, said on Wednesday that Tehran might block oil shipments through the Strait of Hormuz, a major route for transporting crude in the Gulf.
Even if the US government grants some waivers to allies, FGE estimated 1.7 to 2 million bpd of crude and condensate would be cut out of markets once its sanctions are implemented.
Renewed U.S. sanctions on Iranian oil appear set to tighten supplies further. Many coutries have not committed to the U.S. ban, and if prices rise, Iran may ultimately take in just as much money even with fewer exports.
Saudi Arabian Oil Co will change its Asia crude pricing benchmark by replacing Platts' Oman assessment with the Dubai Mercantile Exchange's Oman futures from October 1.
Meanwhile, the market continued to watch rising USA crude output, with this week's oil drilling rig count data, an indicator of future production, due at 1 p.m.