Persian engulfed

9 May 2018 By George Hay, Lauren Silva Laughlin Follow @gfhay

Since 2016 the kingdom has championed output cuts that have drained a supply glut and helped spur prices. Now that the U.S. President has amped up sanctions on Iran, Saudi can fill any gap left by lower Iranian exports. What it loses on price, it gains in volume and U.S. gratitude.

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U.S. Treasury Secretary Steven Mnuchin said on May 8 he did not think the oil price would rise after renewed U.S. sanctions hit Iranian production.

Mnuchin, speaking to reporters at a news briefing, referred to conversations with "different parties" who would be willing to produce more oil to offset the fall in Iranian output.

Saudi Arabia is monitoring the impact of the U.S. withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any potential shortage. But it will not act alone to fill in the gap, according to a Reuters report on May 9, citing a source familiar with the kingdom’s oil thinking.

Brent crude prices were trading at $76.96 as of 1410 GMT on May 9, up 2.8 percent.

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