President Trump on Friday blamed OPEC for making crude oil prices “artificially high” by cutting supply to drive up prices.
“Looks like OPEC is at it again,” Trump said on Twitter. “Oil prices are artificially Very High! No good and will not be accepted!”
Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!
— Donald J. Trump (@realDonaldTrump) April 20, 2018
Oil prices reached a three-year high this week, and rose above $69 per barrel.
Trump is likely referencing an agreement between OPEC and non-OPEC nations such as Russia that began in January 2017 to drive up oil prices by cutting 1.8 million barrels per day. The agreement is set to expire by the end of 2018, but Saudi Arabia and Russia have talked about extending it.
Saudi Arabia’s energy minister Khalid al-Falih hit back at Trump Friday, saying “there is no such a thing as artificial prices.”
The Saudi energy minister said he is not worried that rising oil prices near or above $70 per barrel will reduce demand.
“I have not seen any impact on demand with current prices. We have seen prices significantly higher in the past, twice as much as where we are today,” he said, adding the world economy has the “capacity” to absorb higher prices.
The International Energy Agency said this week that OPEC had nearly reached “mission accomplished” in ending the oil glut.
Energy experts have connected the recent price surge to geopolitical risks in oil-producing countries, including the possibility of renewed sanctions on Iran if the Trump ends the nuclear deal with that country.
Crude oil prices have recovered to near $70 per barrel from below $30 in 2016, but energy experts have speculated the historic surge in U.S. output could limit the price surge.
The U.S. is anticipated to experience “explosive growth” in oil production in 2018 and will surpass Saudi Arabia’s output for the first time, the International Energy Agency reported in January.
Trump’s tweet comes as oil officials from Saudi Arabia and Russia are meeting this weekend to discuss compliance with the supply cut agreement.
They are also discussing the future of the deal.
