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Saudis give US no immediate pledge to boost oil output

  • Market: Crude oil
  • 16/07/22

Saudi Arabia has given the US no concrete commitments on boosting oil output and will only do so if the market is in deficit, state minister of foreign affairs Adel al-Jubeir said in comments aired early Saturday.

"Saudi Arabia is committed to stabilizing international oil markets and making sure that the markets are adequately supplied with crude oil," al-Jubeir said following meetings in Jeddah late on Friday between Saudi Arabia's King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman and US President Joe Biden.

"We do that by consulting with our Opec and Opec+ partners to assess whether there is a need to bring more oil onto the markets," al-Jubeir said. "These assessments will be made based on what the market needs are. If there is a market need, there will be steps taken to ensure that those needs are met."

Al-Jubeir's comments appeared to contradict the US president's own assessment of the discussions, which he said gave him the belief that Saudi Arabia would take "further steps" soon to ensure adequate global oil supplies.

"I am doing all I can to increase the supply for the US, which I expect to happen," Biden said late on Friday. "The Saudis share that urgency and based on our discussion…I expect we'll see further steps in the coming weeks."

Opec and its non-Opec partners, known formally as Opec+, next meet virtually on 3 August.

Biden arrived in Jeddah on Friday afternoon for the third and final leg of his Middle East tour, which began in Israel on 13 July. Biden is due to depart the Red Sea port city on Saturday afternoon, following a Mideast Gulf summit bringing together the leaders of the US, the six Gulf Co-operation Council (GCC) countries as well as Iraq, Egypt and Jordan.

More crude not the answer

With the US facing record-high gasoline prices, and despite his best efforts to suggest otherwise, Biden's trip to Saudi Arabia has been framed by many at home as being primarily about energy, and securing a commitment from Opec's largest oil producer to pump more oil.

White House officials also said in the lead up to Biden's visit to the kingdom that they were hopeful Opec and its non-Opec partners would take additional action to raise oil supplies to help address rising gasoline prices at home.

But al-Jubeir dismissed the link altogether, saying that the record high pump prices had much more to do with a lack of refining capacity in the US than a lack of crude oil supply in world markets.

"With regard to the price of gasoline in the US, that's really a function of a lack of refining capacity," al-Jubeir said. "The US has not built a refinery in more than 40 years… so increasing crude oil supplies to the US is not going to alleviate the problem."

By Nader Itayim

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03/05/25

Opec+ eight to agree another accelerated hike for June

Opec+ eight to agree another accelerated hike for June

London, 3 May (Argus) — A core group of eight Opec+ members look set to today to accelerate, for a second consecutive month, their plan to unwind some of their production cuts, four delegates told Argus . As it did for May, the group would again raise its collective output target by 411,000 b/d in June, three times as much as it had planned in its original roadmap to gradually unwind 2.2mn b/d of crude production cuts by the middle of next year. The original plan envisaged a slow and steady unwind over 18 months from April, with monthly increments of about 137,000 b/d. But today's decision would mean that the eight — Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan — will have unwound almost half of the 2.2mn b/d cut in the space of just three months. The decision to maintain this accelerated pace into June would be somewhat surprising, particularly given the weakness in oil prices and the outlook for the global economy. The eight's decision last month to deliver a three-in-one hike in May was seen as a key reason for the recent slide in oil prices, alongside US President Donald Trump's tariff policies. Front month Ice Brent futures have fallen by about $13/bl since early April to stand at just over $61/bl. While Opec+ has said that it is acting to support an expected rise in summer demand, the decision to speed up the output increases once again appears to be driven by a desire to send a message to countries that have persistently breached their production targets — most notably Kazakhstan and Iraq. By Aydin Calik, Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Eight Opec+ members weigh further acceleration

02/05/25
News
02/05/25

Eight Opec+ members weigh further acceleration

Dubai, 2 May (Argus) — A core group of eight Opec+ producers meet on 3 May to decide whether to repeat last month's surprise move to add extra oil to an increasingly weak market. The main motivation for the group of eight's decision to triple the size of their output increase for May remains, suggesting that a repeat could be on the cards for June. As the dust began to settle on last month's decision, it became clear that raising their combined output target by 411,000 b/d in one month, rather than the scheduled 137,000 b/d, was rooted not only in stronger fundamentals, as the official communique suggests, but also in a desire to send a message to those countries that have persistently breached their production targets. The main culprits are Iraq and Kazakhstan, which have consistently failed to keep their production in check since the start of last year (see graph). The two are left with a lot to do by way of compensating for those excess barrels between now and the middle of next year (see graph). Russia, too, has overproduced during that period, but to a much lesser degree relative to its overall output. That persistent overproduction has been a source of deep frustration among other countries in the group of eight — principally the core of Opec's Mideast Gulf members — that have "sacrificed", in the words of one delegate, to adhere to their targets. April's decision was a nod to those that have sacrificed and a sharp warning to Kazakhstan and Iraq to do better and to do so quickly. Two delegates stressed to Argus at the time that the coming weeks would be critical for Baghdad and Astana to show that they were serious about abiding by their quotas. Failure to do so could trigger another "surprise" move for June, they said, possibly even another three-in-one hike. It was little surprise, then, that some ill-timed comments by Kazakh energy minister Yerlan Akkenzhenov on 23 April — in which he explicitly said Astana's national interests take priority over its Opec+ commitments, and that the country simply "cannot" reduce output — triggered serious speculation about whether the eight may repeat last month's decision. March data from Iraq, too, were not ideal, in that while they showed that Iraq did produce below quota, its efforts to compensate fell well short. Timing is everything Some in the group of eight may well be tempted to go down that route, thinking a second consecutive "shock" could deliver the desired wake-up call that the first did not. Two delegate sources confirmed to Argus that another 411,000 b/d target increase for June remains a distinct possibility. But such a course of action would be risky. Crude is already trading $12/bl below where it was when the group last met, and demand-side concerns are again on the rise because of the potential impact of US trade tariffs. The Opec secretariat and the IEA downgraded 2025 oil demand growth forecasts in their latest oil market outlooks. Opec revised its forecast down to 1.3mn b/d from 1.45mn b/d in its previous report. The IEA revised down its forecast by a sizeable 310,000 b/d to 730,000 b/d for 2025, despite "robust" consumption in the first quarter. It downgraded its forecast for April-December by 400,000 b/d. Another three-in-one hike for June would be "difficult" to imagine in this market, one delegate says. With that said, the eight's options include a "standard" 137,000 b/d rise to the group's collective target for June, in line with the original schedule, or, at a push, a two-in-one hike. That would not only send that internal message to the least compliant of the group, but also act as a show of good faith towards US president Donald Trump ahead of his visit to Riyadh, Abu Dhabi and Doha on 13-16 May. By Nader Itayim, Bachar Halabi and Aydin Calik Opec+ overproducers Opec+ compensation plan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Chevron has not discussed Kazakhstan Opec+ target: CEO

02/05/25
News
02/05/25

Chevron has not discussed Kazakhstan Opec+ target: CEO

London, 2 May (Argus) — Chevron has not held discussions with Kazakhstan about the country's Opec+ targets, chief executive Mike Wirth said today. Kazakhstan's production surged to a record 1.79mn b/d in March , following the start up of a new project at the Chevron-led Tengiz field in January. This left the country 322,000 b/d above its Opec+ target of 1.468mn b/d for the month. Kazakhstan has repeatedly vowed to comply with its Opec+ commitments, and said it would ask foreign operators at its Tengiz and Kashagan fields to reduce output. "We don't engage in discussions about Opec or Opec+ targets," Wirth said on Chevron's first-quarter earnings call today. "The barrels we produce at [Tengiz] are of high value to the government, they're important to their fiscal balance and historically those barrels have not been curtailed." Tengiz production was 901,000 b/d in March, compared with around 600,000-660,000 b/d before the new project came online. Italy's Eni, which is a key partner at the 400,000 b/d Kashagan field, made similar remarks last week. "Neither the operator of the asset, nor the shareholder and the contracting company have been engaged by the authority for any production cuts," said Eni's chief financial officer Francesco Gattei. Kazakhstan is one of the Opec+ alliance's largest overproducers, and there has been no indication that it has tried to reduce output in line with its targets. Kazakhstan's continued overproduction is understood to have contributed towards the decision by eight Opec+ members to add extra crude to the market in May . The eight will meet on 3 May to decide on production levels for June. Two delegate sources told Argus that another 411,000 b/d target increase for June remains a distinct possibility. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Carney to meet with Trump on 6 May

02/05/25
News
02/05/25

Carney to meet with Trump on 6 May

Calgary, 2 May (Argus) — Canadian prime minister Mark Carney will meet with US president Donald Trump on 6 May to try to resolve an ongoing trade war while also discussing the future economic relationship between the two countries. Carney announced his Washington travel plans Friday in his first media appearance following his 28 April election victory , where his Liberal party won 169 of a possible 343 seats in Parliament. Carney's predecessor Justin Trudeau in late November tried to diffuse a trade war before it began in a meeting with Trump, but subsequently was on the receiving end of public taunts about Canada's sovereignty and becoming the US' 51st state. Trump did not say or insinuate that Canada should become the 51st state when they spoke this week, according to Carney. The US has imposed a 25pc tariff on Canadian steel and aluminum since 13 March and Canadian automobiles since 9 April, prompting retaliatory tariffs by Canada. The trade war sparked a wave of anti-US sentiment and became a focal point of the election, contributing to a remarkable rebound for the Liberal party who only months ago faced slim odds of returning to power. "As I've stressed repeatedly, our old relationship, based on steadily increasing integration, is over," said Carney. "The questions now, are how our nations will cooperate in the future, and where we, in Canada, will move on." Carney has vowed to make Canada the fastest growing economy in the G7 with new alliances abroad and yet-to-be decided infrastructure projects playing a key role. "Canada does have other options and that is clear," said Carney, speaking in French. Carney's new cabinet will be sworn in during the week of 12 May and Parliament will return to session on 26 May. Absent will be Conservative leader Pierre Poilievre, who suffered a surprising loss in his constituency and was painted by the Liberals as being too much like Trump. He will be on the outside looking in unless a byelection occurs, which would likely require a Conservative surrendering their seat. If the Conservatives do trigger a byelection to try to get Poilievre back into Parliament, Carney said he will ensure that it happens "as soon as possible". By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US adds 177,000 jobs in April, jobless rate steady

02/05/25
News
02/05/25

US adds 177,000 jobs in April, jobless rate steady

Houston, 2 May (Argus) — The US added 177,000 jobs in April, topping expectations, even as the new US administration's campaign of tariffs against allies and trading partners heightened business and consumer uncertainty. Economists surveyed by Trading Economics had forecast job gains of 130,000 for April. The unemployment rate held steady at 4.2pc in April, the Bureau of Labor Statistics (BLS) reported. Job gains for March were revised lower by 43,000 to 185,000. The unexpectedly strong job report comes two days after the government reported the economy contracted at a 0.3pc annual rate in the first quarter, largely on a surge in imports as companies sought to build inventory ahead of the impacts of President Donald Trump's import tariffs. Consumer and business confidence have tumbled and economists have raised the odds of a US recession this year. US job gains averaged 152,000 in the 12 months prior to April. Federal government employment declined by 9,000 jobs in April and has fallen by 26,000 since January as mass federal layoffs take effect. Employees on paid leave or receiving severance pay are counted as employed, BLS said, so most of the announced federal job cuts do not yet show up in the data. Health care added 51,000 jobs in April, while transportation and warehousing added 29,000 jobs, more than double the average in the prior 12 months. Financial activities added 14,000 jobs. Construction added 11,000 jobs and manufacturing lost 1,000 jobs. Leisure and hospitality jobs grew by 24,000 and health care and social assistance added 78,000 jobs. Average hourly earnings rose by a 3.8pc annual rate, unchanged from the pace in March. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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