Saudi Arabia slashes oil prices after Trump slams the 'OPEC monopoly'

Alex Wong/Getty ImagesUS President Donald Trump.

Saudi Arabia’s state-run oil giant cut its prices on Thursday for first time since February after President Donald Trump lashed out at OPEC for rising US gas prices.

Saudi Arabian Oil Co., also known as Aramco, lowered August prices for light oil to Asia by 20 cents to $US1.90 a barrel above the Middle East benchmark, according to Bloomberg. The reduction comes a day after Trump took aim at OPEC for rising oil prices, urging the cartel to “REDUCE PRICING NOW!”

“The OPEC Monopoly must remember that gas prices are up & they are doing little to help,” Trump tweeted. “If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street.”

The world’s biggest crude exporter is preparing to ramp up oil production, possibly by as much as two million barrels per day, amid US sanctions on Iran.

The White House said Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud agreed to raise output after the Trump administration ordered all countries to stop buying oil from the Islamic Republic by November or face US sanctions, as part of Trump’s withdrawal from the Iran nuclear deal.

Trump’s scramble to slow down the oil rally comes four months ahead of US midterms, where analysts say rising gasoline prices could hurt Republicans. Prices at the pump have soared in recent months, hitting a four-year high Wednesday.

FXTM analyst Lukman Otunuga said at the time that prices received a “solid boost” from the Trump administration’s decision to cut off all imports of Iranian oil in November. The international community had expected sanctions waivers for some countries, a tactic used in the Obama era to avoid supply shocks.

“With renewed geopolitical risk factors likely to stimulate concerns of supply disruptions, oil prices have scope to extend gains in the near term,” Otunuga added.

Iranian OPEC Governor Hossein Kazempour Ardebili claimed Thursday Trump’s tweets are putting upward pressure on prices.

“Your tweets have increased the prices by at least $US10,” Kazempour Ardebili said of Trump, according to news outlet SHANA. “Please stop using this method.”

Also on Thursday, data showed US crude stockpiles rose unexpectedly last week by 1.2 million barrels. Analysts had expected a 4.4 million barrel drawdown.

Oil prices fell more than 1%, but held close to three-and-a-half year peaks. West Texas Intermediate was down 1.2% to $US73.30 a barrel. Brent, the international benchmark, shed 0.5% to $US77.77 a barrel.

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