Trump on Wednesday accused the Organization of the Petroleum Exporting Countries of driving fuel prices higher, and urged Saudi Arabia to pump more if it wanted Washington to continue protecting it against Iran.
"These days... the price is dependent on the behaviour of Mr. Trump", Iranian Oil Minister Bijan Namdar Zanganeh said on state television.
Iran, OPEC's third-largest producer, is facing USA sanctions on its oil exports prompting some buyers to cut purchases. This statement comes in the wake of fresh sanctions on Iran after US President Donald Trump chose to pull out of the nuclear deal with Iran.
Reuters in a report on Friday quoted familiar sources as saying that South Korea would not lift any Iranian crude and condensate in July, a claim that was denied by South Korean embassy in Tehran on Saturday. The top Iranian official emphasized that Tehran will resist U.S. measures and will safeguard its market share by all means.
Based on that assumption, they added, zero Iran exports could push oil up by $US50 a barrel if Saudi Arabia caps out. Two other sources also said South Korea cancelled July loadings of crude and condensate cargoes from Iran as it was uncertain whether they can receive an exemption from US sanctions on Iran trade.
"Putting an actual nominal level of geopolitical risk, supply crunch concerns as well as Opec plus compliance shirking into the current level of oil prices is challenging, but we view that at least an upside risk of Brent and WTI exceeding north of $85 and $80, respectively, in Q3 2018, depending on the magnitude of these disruptions and how they impact the overall supply-demand balance", Ehsan Khomas, head of Research and Strategist for Mena at MUFG, said.
Brent, the worldwide benchmark, is now trading at around $77 a barrel, up more than 25 per cent this year.
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US West Texas Intermediate crude futures ended 21 cents lower at $65.74 a barrel.
Official data that came out on Thursday, a day later than normal due to the July 4 public holiday, showed inventories at Cushing, the delivery point for U.S. crude futures, fell to their lowest in 3-1/2 years.
"Reduce pricing now!" the USA leader tweeted.
Baker Hughes energy services firm said in its report on Friday that United States crude prices jumped to their highest since November 2014 earlier this week.
However, it has not produced more than 10.42 million bpd on an annual basis or 10.63 million bpd in a single month in the last 20 years.
Crude oil could surge to more than $US120 a barrel, according to Bank of America Merill Lynch analysts, if the Trump administration were to order a complete cut-off of Iranian barrels before the end of the year. That compares with averages of $50.85 in 2017 and $43.47 in 2016.
However, oil prices late last month rose to their highest levels since 2014, with political volatility in Venezuela and the collapse of the Iran nuclear day both sending prices up.
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