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Upset by Trump's Iran waivers, Saudis push for deep oil output cut

https://www.reuters.com/article/us-oil-opec-saudi/upset-by-trumps-iran-waivers-saudis-push-for-deep-oil-output-cut-idUSKCN1NK20S


ABU DHABI (Reuters) - When U.S. President Donald Trump asked Saudi Arabia this summer to raise oil production to compensate for lower crude exports from Iran, Riyadh swiftly told Washington it would do so.
ut Saudi Arabia did not receive advance warning when Trump made a U-turn by offering generous waivers that are keeping more Iranian crude in the market instead of driving exports from Riyadh’s arch-rival down to zero, OPEC and industry sources say.Angered by the U.S. move that has raised worries about over supply, Saudi Arabia is now considering cutting output with OPEC and its allies by about 1.4 million barrels per day (bpd) or 1.5 percent of global supply, sources told Reuters this week.

“The Saudis are very angry at Trump. They don’t trust him any more and feel very strongly about a cut. They had no heads-up about the waivers,” said one senior source briefed on Saudi energy policies.
Washington has said the waivers are a temporary concession to allies that imported Iranian crude and might have struggled to find other supplies quickly when U.S. sanctions were imposed on Nov. 4.

U.S. Secretary of State Mike Pompeo said on Nov. 5 that cutting Iranian exports “to zero immediately” would have shocked the market. “I don’t want to lift oil prices,” he said.
A U.S. source with knowledge of the matter said: “The Saudis were going to be angry either way with the waivers, pre-briefed or even after the announcement.”
A U.S. State Department official said: “We don’t discuss diplomatic communications.”
The U.S. shift toward offering waivers adds to tension between the United States and Saudi Arabia, as Washington pushes for Riyadh to shed full light on the murder of Saudi journalist Jamal Khashoggi in the Saudi consulate in Turkey.