Oil prices remain at four-year highs on rising doubts about the capability of Saudi Arabia and other producers to substitute Iran’s crude after the US imposes new sanctions on the country on November 4.
International benchmark Brent crude was up 38 cents at $85.18 a barrel at 0833 GMT Wednesday, after hitting its highest level since November 2004 on Monday at $85.45.
President Donald Trump has pledged to squeeze Iran’s oil exports down to a trickle, with the White House saying Saudi King Salman had promised the US leader that the kingdom had enough spare capacity to replace Iranian barrels.
According to Iran’s OPEC Governor Hossein Kazempour Ardabili, the US president has apparently been duped by Saudi Arabia and his view is finding traction with some analysts.
“The fact that Saudi Arabia has been timid in its reaction has reinforced the notion there is limited spare capacity available,” Olivier Jakob, analyst at Petromatrix, told Reuters.
Last month, Saudi Arabia went along with other OPEC members and key producer Russia not to raise output, rebuffing Trump’s call on the kingdom to open the spigots.
Iraqi Oil Minister Jabar al-Luaibi said on Wednesday OPEC has not revised yet its previous decisions on oil production levels.
“We have not reviewed the increase of production so far,” he told reporters in Moscow. Asked whether OPEC should increase output following a rise in oil prices, he said, “We will see in November.”
Russia’s Energy Minister Alexander Novak said the market has somehow stabilized but uncertainties over US sanctions on Iran could push prices higher.
In Tehran, Vice President Es’haq Jahangiri was quoted as saying that “despite the mischief of the Americans, Iran’s oil exports have surpassed state budget outlay projections”.
“Notwithstanding all the pressures that the Americans are creating on the oil issue, Iran has its own oil customers, and the work is going on in a way that no problems will arise,” he reportedly told a parliament session.
Head of National Iranian Oil Company (NIOC) Ali Kardor said Iran’s oil production continues with full force and the country has no plans to cut its production despite the looming US sanctions.
Minister of Petroleum Bijan Zangeneh also said Iran will go full-throttle to maintain its market share as he blamed Trump for the surge in oil prices.
“The United States is doing all it can to prevent us from producing and supplying oil to the market, but Iran is producing its crude oil with force,” he said.
“Mr. Tramp has said OPEC is responsible for rising oil prices and has to raise production, but one must say that OPEC is not responsible, but the Trump himself is responsible for the rise,” he added.
Zangeneh also said there is no shortage of oil in the market and the rise in prices is due to “psychological factors and political tensions that the Americans are artificially inducing on the market”.
OPEC, he said, is currently producing at maximum capacity and has no spare capacity to pump more.