Saudi Arabia's state-run oil giant cut its prices Thursday for first time since February after President Donald Trump lashed out at the OPEC cartel of oil producers over rising US gas prices.
The Saudi Arabian Oil Co., better known as Saudi Aramco, lowered August prices for light oil to Asia by 20 cents to $1.90 a barrel above the Middle East benchmark, according to Bloomberg. The reduction came a day after Trump took aim at the Organization of the Petroleum Exporting Countries, 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 2 million barrels a 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 Iran by November. Those who don't comply could 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 gas prices could hurt Republicans. Prices at the pump have soared in recent months, hitting a four-year high Wednesday.
The 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.