The Saudi state news agency reported today that the Kingdom is happy with Washington’s decision to not extend the waivers for Iran oil sanctions that it had granted to eight large oil importers last November.
The agency quoted a statement from Saudi Arabia’s Foreign Minister, Ibrahim bin Abdulaziz Al-Assaf, which said, “Saudi Arabia believes the US decision is a necessary step to pressure the Iranian government to stop jeopardizing peace and end their global support for terrorism.”
Regarding oil production, Al-Assaf said Saudi Arabia will cooperate with other producers to make sure the gap left on international markets by the elimination of the waivers is filled.
Yesterday, an Iraqi government official said the country was ready to boost exports by 250,000 bpd in order to compensate for the loss of Iranian barrels. It seems the two largest producers in OPEC will work together to coordinate changes in production rates, which basically means the OPEC+ deal will be ending earlier than originally planned.
However, Bloomberg earlier today cited sources from Saudi Arabia as saying the Kingdom will not rush into reversing its production cuts. First, the source said, Riyadh will make sure that Iranian export shipments are indeed falling before it begins pumping more.
The Bloomberg reports confirm an earlier one by Reuters, which also quoted a Saudi source as saying that Saudi Arabia was ready to reverse the production cuts to make up for lost supply from Iran.
Oil prices hit their highest level since the start of the year on news that the waivers for India, China, Japan, South Korea and a few smaller importers of Iranian crude oil would not be extended. China has been vocal in its opposition to the removal of the waivers while India has stated it would look to other suppliers to compensate for the cutoff of Iranian oil. South Korea and Japan do not expect any major negative impact from the cancelation of the waivers.
By Irina Slav for Oilprice.com
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