Saudis Plan Cautious Response to U.S. Action on Iran Oil
- Riyadh will keep initial increases within OPEC output quota
- Saudi officials felt burned by Trump U-turn on Iran last year
An Iranian national flag flies near gas condensate processing facilities in the new Phase 3 facility at the Persian Gulf Star Co. (PGSPC) refinery in Bandar Abbas, Iran.
Photographer: Ali Mohammadi/BloombergSaudi Arabia is ready to boost oil production in response to tighter U.S. sanctions on Iran, but doesn’t plan any radical moves. The world’s largest crude exporter wants to see a decline in Iranian shipments before raising output significantly, according to people familiar with policy deliberations in Riyadh.
The kingdom’s caution stems from experience. When Trump first said last year he planned to drive Iranian exports to zero, Saudi Arabia took the threat literally responded to pressure from the White House by boosting production to an all-time high above 11 million barrels a day. At the last minute, Trump backtracked, granting waivers that let countries buy Iranian oil without facing U.S. sanctions, and oil prices plunged.