Oil prices dropped on Monday after President Donald Trump urged Saudi Arabia over the weekend to increase its extractions to reduce the price of black gold.
The barrel of Brent for September closed at $77.30 in the London market, which meant a drop of $1.93 compared to Friday. In New York the barrel of “light sweet crude” (WTI) for delivery in August lost 21 cents at $73.94.
In a tweet, Trump said on Saturday that Saudi Arabia, the world’s leading exporter and leader of the Organization of the Petroleum Exporting Countries (OPEC), could increase production by about two million barrels per day.
The White House and Riyadh then tried to mitigate the comment by stating that those two million barrels would be available resources when necessary to achieve balance and market stability.
The president pushes Saudis to compensate the drop in the the supply that will occur when they begin to apply the American sanctions to Iran from November 4th,”
explained analysts of the RaboBank.
The White House announced last week that it will sanction the countries that buy Iranian crude to punish Iran for the nuclear plans and for considering it a factor of disturbance in the Middle East.
If the United States adopts zero tolerance against the Iranian oil importing countries, prices will go up,”
said JBC analysts who believes that Saudi Arabia does not have the capacity to cover the total absence of Iranian crude in the market.