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3 July 2018
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Oil
(The Total Investment & Insurance Solutions)
Iran issued a new warning over Mideast oil supplies as the United Arab
Emirates said on Tuesday it could increase its own production, the latest
remarks to follow President Donald Trump's demand for lower global energy
prices.
The comments by Iranian President Hassan Rouhani and the unexpected
announcement by the UAE's oil-rich capital Abu Dhabi came as U.S. benchmark
crude traded around $75 a barrel.
A recent decision by the Organization of the Petroleum Exporting
Countries to increase the cartel's own production by 1 million barrels a day
has yet to tamp down prices. That's led to higher prices at gasoline pumps in
the United States as it heads toward midterm elections for Congress.
Speaking to Iranian expatriates Monday night in Switzerland, where he
was on an official visit, Rouhani took aim at America.
The U.S. pulled out of the Iran nuclear deal in May and initially said
it wanted allies to stop buying Iranian crude entirely. The State Department
said Monday it would examine waivers on a "case-by-case basis" as it
re-imposes sanctions.
"The main goal of the United States by imposing sanctions is to put
pressure on people, but they claim that they want to put pressure on the
Iranian government," Rouhani's website quoted him as saying. "But
when they apply sanctions on people's basic needs like medicine, who will be
put under pressure?"
Rouhani added that if Iran's crude oil exports were threatened, the rest
of the Mideast's would be as well.
"It seems they do not understand what they are saying when they say
Iran will not be allowed to export even a single drop of oil," Rouhani
said in remarks aired by Iranian state television. "All right, if you can
do such a thing, do it and see the result!"
Rouhani did not elaborate, but Iran long has asserted it could shut down
the Strait of Hormuz, the narrow body of water that separates the Persian Gulf
from the wider world. A third of all oil traded by sea passes through the
strait and the U.S. Navy regularly has direct, tense encounters with Iran's
paramilitary Revolutionary Guard there.
The U.S. Navy's 5th Fleet, which patrols the region, has said it has not
seen any "unsafe and unprofessional" actions by Iranian naval forces
in the Persian Gulf since August 2017. It did not immediately respond to a
request for comment Tuesday over Rouhani's remarks.
Separately, Iran's Interior Minister Abdolreza Rahmani Fazli warned
Tuesday that "if we close our eyes for 24 hours, 1 million refugees will
go toward Europe through our Western borders" via Turkey. Some 5,000 tons
of narcotics also could be smuggled to the West, he added, according to the
semi-official Fars news agency.
Iran lies on a major trafficking route between Afghanistan and Europe,
as well as the Persian Gulf states. Large drug seizures are common across the
region.
Meanwhile, the state-run Abu Dhabi National Oil Co. issued a surprise
statement Tuesday saying it has an oil production capacity of 3.3 million
barrels per day. It added that it "remains on track to increase its
production capacity to 3.5 million (barrels per day) by the end of 2018."
The company also said it "has the ability to increase oil
production by several hundred thousand barrels of oil per day, should this be
required to help alleviate any potential supply shortage in the market."
The oil company previously announced in November it had plans to expand
its capacity to 3.5 million barrels of oil per day. It produced some 2.8
million barrels of oil per day in May, according to the most-recent figures
released by OPEC.
The UAE, an American-allied federation of seven sheikhdoms on the
Arabian Peninsula, hosts some 5,000 U.S. troops. Dubai also is the U.S. Navy's
busiest port of call abroad.
Its statement Tuesday comes as Trump increasingly has criticized OPEC
for not doing enough to lower oil prices. On Saturday, Trump wrote on Twitter
that he had received assurances from King Salman of Saudi Arabia that the
kingdom will increase oil production, "maybe up to 2,000,000 barrels"
in response to turmoil in Iran and Venezuela. The White House later seemed to
walk back on Trump's tweet.
Saudi Arabia has acknowledged the call took place, but mentioned no
production targets. The kingdom currently produces some 10 million barrels of
crude daily. Its record is 10.72 million barrels a day.
Saudi Energy Minister Khalid al-Falih called his Russian counterpart
Alexander Novak to discuss the recent OPEC deal, according a report Tuesday by
the state-run Saudi Press Agency.The
Total Investment & Insurance Solutions
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