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November 17th, 2018:

Saudis Move to Counter U.S. Oil Strategy

American Energy Coalition - November 17th, 2018

"Saudi Arabia is moving to cut the world’s oil supply after U.S. government deals allowed hundreds of thousands of barrels a day of Iranian crude to flow onto world markets, driving down prices", according to a story published in today's Wall Street Journal.

"The deals put Saudi Arabia at odds with Washington at a time when relations are already strained by the murder of journalist Jamal Khashoggi. The kingdom wants to trim production to boost oil prices to about $80 a barrel in support of its economy, Saudi advisers say. President Trump has warned against a production cut and called for lower prices."

"The Trump administration had threatened a complete halt to Iranian oil exports, prompting other producers to boost output to compensate. Earlier this month, the U.S. made deals authorizing exemptions to eight countries, without disclosing the terms", according to the Journal.

"But people familiar with the sanctions waivers say American officials are forecasting some 900,000 barrels a day of Iranian crude sales by April. That would be down at least 40% from pre-sanctions levels."

"The shifts are rattling oil markets. In just over a month, Brent—the global benchmark—fell more than 21%. While maintaining it still wants to bring Tehran’s crude exports to zero, the administration isn’t saying how much Iranian oil the eight countries are allowed to buy. The nations, including China and India, have negotiated limits in secret with the U.S.", says the WSJ Article.

"Saudi oil officials say they are considering advocating a production cut of as much as 1.4 million barrels a day at the Organization of the Petroleum Exporting Countries’s next meeting on Dec. 6."

"But OPEC officials say they are having difficulty calculating how much to produce because of U.S. secrecy surrounding its Iran sanctions efforts. That opacity, they say, already tripped up an OPEC-Russia alliance formed to pump extra oil into markets to stabilize supplies and prices" according to the story.

"The lack of detail about the size of the waivers is “confusing for markets,” said Sara Vakhshouri, president of Washington-based consulting firm SVB Energy International."

To read the entire Wall Street Journal Article, go to: https://www.wsj.com/articles/u-s-deals-on-iran-oil-dampen-prices-spark-clash-with-saudis-1542396490

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