Oil prices rose to their 2019 high at $75 per barrel of Brent crude after major oil exporters said they would not immediately rush to produce more oil in the face of US sanctions against Iran.
OPEC is due to meet in June, where the Iran question will no doubt be raised. But oil and gas leaders are taking a cautious approach, with Kuwait's oil minister Khaled Al Fadhel noting that a decision would be taken only after a review of oil prices.
Indeed, the surprise issuance of eight waivers allowing countries to continue to import Iran's oil was a shock to the market and saw oil prices spiral from a peak of $86 per barrel in October 2018 to $50 ber barrel.
While Trump often blames OPEC for high oil prices, this demonstrated the ability of the US to impact the oil market--even though its own oil production fluctuates based on the oil price.
Now, with Iran oil output set for further decreases, the Trump administration has said that its oil exporting allies would fill any supply gap. Khalid Al-Falih echoed those sentiments in a statement put out by the Saudi Press Agency.
"Saudi Arabia will coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance," the statement wrote.
Saudi Arabia has historically taken the role of swing producer to balance oil supply, but it is unclear how this will impact the existing OPEC+ deal to cut output by 1.2mn barrels per day (bpd), the majority of which has been shouldered by Saudi Arabia and Russia.
Reuters reported that Saudi output would increase in May, but would remain under the limits imposed by the OPEC+ deal. It cited anonymous sources as saying that the rise in output was unrelated to the expiry of US waivers on Iran oil sanctions.