The probability is very low that President Trump will be able to arm-wrestle Muhammed bin Salman of Saudi Arabia to produce more oil.
That’s what Bjarne Schieldrop, chief commodities analyst at Skandinaviska Enskilda Banken AB (SEB), said in a report sent to Rigzone by the SEB team on Friday, adding that “Saudi Arabia is perfectly happy within its OPEC+ cartel, with no visible plans of breaking out of that organization just to help Donald Trump deliver on his election promises of lower oil and gasoline prices”.
“It is however possible that Saudi Arabia would accept to increase production if new U.S. sanctions were to drive down production and exports of oil from Iran and Venezuela and possibly now also Russia,” he added.
“But not at all just to drive down the oil price because Trump says so. Saudi Arabia after all needs an oil price of $80 per barrel more than ever,” Schieldrop continued.
In the SEB report, Schieldrop highlighted that Brent crude “traded down 0.9 percent, and for the 6th day in a row, yesterday [Thursday] to $78.29 … and below its 200dma following Trump calling for more oil from Saudi Arabia in order to lower the oil price, and as a consequence inflation and then interest rates”.
Rigzone has contacted the Trump transition team, the White House, the Saudi Arabia Ministry of Foreign Affairs, the Saudi Arabian embassy in the U.S., and OPEC for comment on Schieldrop’s statements. At the time of writing, none have responded to Rigzone yet.
A statement posted on the White House website on January 23 noted that, “on Wednesday, President Donald J. Trump held his first foreign leader call with Crown Prince Mohammed bin Salman of the Kingdom of Saudi Arabia”.
“The two leaders discussed efforts to bring stability to the Middle East, bolster regional security, and combat terrorism,” the statement added.
“Additionally, they discussed the Kingdom of Saudi Arabia’s international economic ambitions over the next four years as well as trade and other opportunities to increase the mutual prosperity of the United States and the Kingdom of Saudi Arabia,” it continued.
A statement posted on OPEC’s website on December 5 highlighted that Saudi Arabia’s required production level for 2025 and 2026 is 10.478 million barrels per day. That statement pointed out that this required production level “is before applying any additional production adjustments”.
A separate statement posted on the OPEC site on the same day revealed that Saudi Arabia and seven other OPEC+ countries decided to extend additional voluntary adjustments of 1.65 million barrels per day, that were announced in April 2023, until the end of December 2026.
That statement also revealed that those countries will extend additional voluntary adjustments of 2.2 million barrels per day, that were announced in November 2023, until the end of March 2025. These will be “gradually phased out on a monthly basis until the end of September 2026”, that statement highlighted.
A table accompanying that statement – which showed “production levels with the phase out of only November 2023 voluntary adjustments, which will be applied starting from April 2025 until September 2026” – outlined that Saudi Arabia’s production will come in at 8.978 million barrels per day from January to March.
The table showed that the country’s output will come in at 9.034 million barrels per day in April, 9.089 million barrels per day in May, 9.145 million barrels per day in June, 9.200 million barrels per day in July, 9.256 million barrels per day in August, 9.311 million barrels per day in September, 9.367 million barrels per day in October, 9.422 million barrels per day in November, and 9.478 million barrels per day in December.
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