The Obama administration is pressing Saudi Arabia to boost its oil output in order to fill a supply gap arising from economic sanctions on Iran, a Reuters report revealed quoting Gulf sources, adding that Riyadh is not in a position to increase its output before July.
“There were talks held between Saudi and the US and the Americans asked if Saudi could be accommodating once the sanctions take effect in July. And the Saudi response was that it was ready to meet demand in the market if required, but would not like to take part in the politics,” one Gulf official said on condition of anonymity.
Iranian crude will be hit by a European Union embargo from 1 July after which prices are likely to skyrocket. US and European financial sanctions are making it difficult for other Iranian oil importing nations to process payments.
“There will not be any surprises in Saudi production over the coming few months, we are yet to see what demand in April will be. But generally production will stay up or down 200,000 barrels per day from the current 9.8 (million bpd),” the official said.
“The situation is still not clear, by July there will be a clearer picture,” another Gulf source said.
US President Barack Obama’s approval rating now stands at 41%, a nine-point drop from his position just one month ago, according to a New York Times/CBS News poll released Monday. A recent Washington Post/ABC News poll put Obama’s job approval at 46%, down four points from last month.
Over all, 54 percent of poll respondents believed that a president can do a lot to control gas prices, as opposed to 36 percent who believe they are beyond a president’s control.
The US President has attempted to water down criticism by insisting that increased domestic production of oil and gas is the only way out. “Despite the gains we’ve made, today’s high gas prices are a painful reminder that there’s much more work to do free ourselves from our dependence on foreign oil and take control of our energy future,” Obama said in a statement on Tuesday. The pronouncement came in the wake of a progress report on the country’s energy future that was released earlier this week. “And that’s exactly what our administration is committed to doing in the months ahead,” he added.
Iranians have already warned the US and its allies that imposing sanctions on its oil will push prices to unsustainable levels and lead to dangerous consequences for the whole world.
“As soon as such an issue is raised seriously the oil price would soar to above $250 a barrel,” Ramin Mehmanparast, Iranian spokesman, told the reformist daily Sharq in December last year when the US started to impose economic embargo on the Islamic Republic.
“Imposing sanctions on oil and gas is among the sanctions that, if one wants to do that, the consequences should be fully considered before taking any action,” he said while warning US and its partners not to rush into any aggression.
Iran is the world’s third largest oil exporter and supplies 20 per cent of EU’s crude demands.
Sources: Reuters, PBS