Four loud explosions heard in Saudi Arabia

US Oil Production up in Face of OPEC Supply Freeze

President Donald Trumpsaid Tuesday he was pulling out of a multilateral deal that removed previous sanctions on Tehran in exchange for Iran abandoning its nuclear ambitions.

But a drop in Iranian exports due to a return of US sanctions, plus involuntary supply losses in other OPEC members such as Venezuela, would mean the supply cut would be significantly larger than intended.

'Therefore, if Saudi Arabia and United States have planned to influence Iran's oil market, since they have high production capacity, the plan is probably effective.' Zamaninia said. Prior to the signing of the Vienna agreement, Iran has exported one million barrels a day.

Last month, Trump accused OPEC in a tweet of "artificially" boosting oil prices.

OPEC's oil supply-cutting deal with non-OPEC producers such as Russian Federation has helped to clear a global oil supply glut and boost prices.

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But a drop in Iranian exports due to USA sanctions, plus supply disruptions in other OPEC members, such as Venezuela, could reduce supply more than planned, leading to a potential price spike.

The kingdom is customarily coy about how it might respond but the prospective removal of Iranian crude from the market will send oil prices sharply higher unless other producers step up to fill the gap.

Current OPEC and non-OPEC production levels were specified for a world over-supplied with crude.

"You only handle (output) when you have a semi-clear idea of what would be the potential impact".

The collapse in Venezuelan output has reduced production much more than intended and caused global oil inventories to draw down much faster than OPEC predicted at the end of a year ago. Saudi Arabia has also imposed an air and sea blockade on Yemen.

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