Iranian OPEC Governor Hossein Kazempour Ardebili said on Thursday that Trump had raised oil prices through his tweets. Some OPEC members, including Venezuela and Libya, haven't been pumping up to their limits, contributing to gains in prices over the past week. Prices have also increased due to the persisting US-backed troubles in Venezuela, as well as with the unrest in Libya over control of that country's oil infrastructure.
Oil prices edged up on Wednesday following a report of tightening USA fuel inventories amid an outage at Syncrude Canada oil sands facility in Alberta, which usually supplies the United States.
The crude market has balanced out due to an effort by the Organization of the Petroleum Exporting Countries and a handful of external producers such as Russian Federation since previous year to remove nearly 2% of the supply and mop up an oil glut that was weighing on oil prices. It's telling that this is his third provocation on oil prices since April.
According to Organisation of Petroleum Exporting Countries (OPEC), Saudi Arabia produces approximately 10 million barrels of crude per day. Republican presidents, especially George H.W. Bush and his son, used diplomatic channels with Saudi Arabia, the world's biggest exporter which pumps nearly one-third of OPEC's output.
Recent price rises have also been spurred by a United States announcement that it plans to re-introduce sanctions against Iran from November, which will also target its oil industry.
In May, the USA retreated from a multilateral deal with Iran regarding its nuclear disarmament program, and imposed sanctions to limit the world's fourth largest oil exporter's access to global markets.
The president also had tough words for other U.S. allies.
Against this backdrop, the oil market could be sorely tested in the second half of the year and into 2019, unless demand slows, OPEC outages are less than expected, or non-OPEC producers such as the United States, Canada, and Brazil produce higher than forecast. The state-managed model of Saudi Arabia and its compatriots no longer has the same lock on the global oil supply that it used to.
Michael Armstrong, regional director for the Middle East, Africa and south Asia (Measa), FCA and Institute of Chartered Accountants in England and Wales (ICAEW), said due to surge in oil price, the UAE economy will bounce back in 2018 with growth accelerate from 1.5 per cent last year to 2.6 per cent this year.
Oil briefly touched $75 a barrell on Tuesday before retreating following the news of the Saudi government decision.
After the U.S. withdrew from the Iranian nuclear deal in May, it said it would reimpose economic sanctions against Tehran by November.
"We do not know what the reaction of Russian Federation and other OPEC member countries will be regarding the violation of the agreement by Saudi Arabia".
"Opec will, from July 1, strive to adhere to the overall conformity levels for the remaining duration of the Declaration of Cooperation", said Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Industry, on Tuesday. OPEC should reject the USA call for a production increase which is "politically motivated against Iran", he said.