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.
A gallon of regular gasoline in the U.S. on average now sells for $2.69,
down from $2.90 a month ago, according to AAA. Those lower prices likely
quieted Trump, but production cuts could again boost prices at the pump.