Urging our crude oil exports does not mean that OPEC is moderating

Urging our crude oil exports does not mean that OPEC is moderating

In fact, I believe that the main reason is Saudi Arabia. Saudi Arabia and various OPEC member states reached an agreement on production cuts in June of this year, but during the production cuts, Saudi Arabia followed Trump's arrangements and increased production by a large amount, which made the member states very dissatisfied. Iran has publicly accused Saudi Arabia of increasing production. Saudi Arabia has increased production, and Saudi Arabia has reduced oil prices. Now it is reasonable for these countries to be unwilling to pay the price Urging our crude oil exports does not mean that OPEC is moderatingif they are not willing to reduce production.

Oil market observers may turn to Baker Hughes' rig inventory data on Friday to look for signs that US oil production continues to shrink. The company previously reported that the number of oil rigs remained unchanged last week, with only 869 rigs, the highest level since 205 months.

On the other hand, the US oil sanctions on Iran will also come on the 4th. Originally, the United States expected that after sanctions on Iran, Saudi Arabia could increase production to make up for Iran's oil supply gap. Now that the relationship between Saudi Arabia and the United States is tense, it is very likely that Saudi Arabia will ignore Trump's request and stop increasing production.

It is worth noting that, according to foreign media reports, the UAE’s oil chief has denied the news that the United States had asked OPEC to increase production. With further tears within OPEC, Saudi Arabia and Russia may independently start to increase production despite the opposition within OPEC. According to Bloomberg reports, Saudi Arabia’s daily crude oil output in May exceeded 10 million barrels, reaching the highest level since October last year.

In addition, it has been half a year since the EU established the SPV system for Iran that avoids the US dollar and is independent of the SWIFT settlement system. There has been no news. Although the EU says it will be established, it is difficult to guarantee that it will not be affected by US sanctions.

Cohen said: SaUrging our crude oil exports does not mean that OPEC is moderatingudi Arabia neither wants to disappoint American policymakers nor lose its credibility. In our view, Trump has made it clear in his Twitter that he does not want to see oil prices rise, so this will be part of OPEC's long-term goal.

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