Donald Trump sent oil prices sliding on Monday after he suggested in a tweet that Saudi Arabia may boost production by more than expected.
The price of Brent crude – a global benchmark – fell 0.8 per cent to $78.54 (£59.69) on Monday while another widely watched measure, West Texas Intermediate, fell 0.25 per cent to $73.95.
It came after the US president tweeted on Saturday: “Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference...Prices to [sic] high! He has agreed!”
Opec, the cartel of oil-producing countries of which Saudi Arabia is an influential member, last month voted to increase production by up to 1 million bpd (barrels per day).
On Saturday a senior Saudi official told The Wall Street Journal that the kingdom had not promised to raise production beyond that level. Instead, assurances had been given that it had the capacity to meet demand.
The White House said late on Saturday that Saudi Arabia had confirmed that it had 2 million bpd of capacity “which it will prudently use if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality.”
Any increase in production beyond the level agreed by Opec would anger other members of the group, notably Iran which has recently been hit by the announcement of renewed US sanctions.
Iran asked other Opec members to “refrain from any unilateral measures” to further increase production.
“Opec decisions by no means warrant any action by some of its member countries in pursuit of the call for production increase by US, politically motivated against Iran,” Iranian oil minister Bijan Zanganeh said in letter to United Arab Emirates energy minister Suhail Mohamed al-Mazrouei, who is serving as Opec’s president.
“As we are all in agreement to depoliticise our efforts in the Opec, we should not let others take politicized measures targeting Opec’s unity and independence,” Mr Zanganeh added.