Iran Deal: Saudi Arabia Will Not Act Unilaterally in Oil Markets

Iran Deal: Saudi Arabia Will Not Act Unilaterally in Oil Markets

Riyadh is working closely with the UAE and Russia on “coordination and market consultations,” regarding the impact of US President Donald Trump’s decision to pull out of the 2015 Iran nuclear deal, an OPEC source close to Saudi Arabia said, according to Reuters.

The Islamic Republic’s oil supplies fell by roughly 1 mb/d when sanctions on Iran were last imposed. However, the country reestablished itself as a major oil exporter after the embargo was lifted in January 2016. It is expected that oil exports will decline after the sanctions are reimposed on the country’s central bank and oil sector.

“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly. We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” the OPEC source said on May 9.

“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”

Oil prices rose more than 2% on May 9, after President Donald Trump announced the US withdrawal from the Iran nuclear deal and a reimposition of the “highest level” of sanctions on the Islamic Republic, Reuters reported.

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