US Asks OPEC To Increase Oil Production

The United States government has unofficially asked Saudi Arabia and some other OPEC producers to raise oil output, but it has not requested a specific figure, three OPEC and industry sources said on the 5^th June.

The US request to raise output has been made unofficially from Washington to each of the oil producers rather than to the Organisation of the Petroleum Exporting Countries as a group, the sources said.

Earlier on the 5^th June, Bloomberg reported that the US government had asked Saudi Arabia and some other OPEC producers to increase oil production by about one million barrels per day (bpd).

US Treasury Secretary Steven Mnuchin said on the 8^th May, the day that President Donald Trump announced Washington would “withdraw” from the Iran nuclear deal and re-impose sanctions on Tehran, that some countries were willing to increase oil output to offset losses to the global market.

A spokeswoman at the White House’s National Security Council, asked about requests for more oil output, said: “We welcome any market-based action which increases energy access and fosters a healthy global economy.”

OPEC is in the midst of a supply-cutting deal with Russia and other non-members. With oil recently reaching US$80 a barrel, the highest level since 2014, producers are discussing easing some of the cutbacks and will meet to set policy later in June.

“Any decision has to be a collective decision and taken after debate. Now the most important thing for OPEC is to keep this group together,” an OPEC source said.

“Even if the US has asked for one million, does it mean that OPEC and its allies would raise by one million?” the source said.

Reuters reported on the 25^th May that the producers were considering a supply increase of one million bpd, with a final decision to be made at the meeting in Vienna of OPEC and non-OPEC ministers on the 22^nd and 23^rd June.

Source: Rigzone