Iran Claims Trump's Demand for Lower Oil Prices has Caused a $10 Increase in Crude

Another analyst eschews popular thought and says prices may indeed drop later in 2018. File Image / Pixabay

Even though the press he gets is usually negative, there's no denying U.S. president Donald Trump's effortless ability to garner attention, especially when he tweets; and his latest on-line demands for the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices has caused Iran to launch a counter-offensive by declaring that his intention to stop Iranian exports will merely hurt his own economy.

Trump once again called on OPEC countries to do more to bring down crude prices and linked U.S. foreign policy to his demand, saying the U.S. defends some oil producing countries "for very little" money.

Hossein Kazempour Ardebili, Iran's OPEC governor, told news agency SHANA that "Trump's demand that Iranian oil should not be bought, and (his) pressures on European firms at a time when Nigeria and Libya are in crisis, when Venezuela's oil exports have fallen due to U.S. sanctions, when Saudi's domestic consumption has increased in summer, is nothing but a self harm.

"It will increases the prices of oil in the global markets; at the end it is the American consumer who will pay the price for Mr. Trump's policy."

As for Trump's enthusiastic use of social media, Ardebili added, "Your tweets have increased the prices by at least $10; please stop this method."

Joining the chorus of indignant outcries was Iranian president Hassan Rouhani, who was quoted by state news agency IRNA as saying, "The Americans say they want to reduce Iranian oil exports to zero; they have talked without thinking carefully [and] it shows they have not thought about its consequences."

Left unmentioned by the Iranians and completely ignored by mainstream media is substantial evidence that the cause of the Iranian ire - Trump scrapping the nuclear deal fostered by the Barack Obama administration - was heavily skewed in favour of the Islamic republic, at the expense of American interests and security.

However, there's no question that with U.S. gasoline prices climbing above $3 per gallon in many states, Trump has come under increasing pressure to come up with a solution, and as such, his liaison with Saudi Arabia, in which the kingdom has agreed to pump all-out to compensate for not only Iranian export losses but those of Venezuela, is the strategy - although unsurprisingly many western analysts doubt the Saudis can pump the required amount in so short a time.

But not all analysts foresee crude prices remaining at current levels: NAB said its oil price forecasts "point to Brent spending the next few months largely in the mid-to-high $70s [per barrel] range, although meaningful OPEC-Russia output increases could push prices lower later in the year and higher U.S. shale production should impose an upside limit on West Texas Intermediate."

Roberto Friedlander, head of energy trading at Seaport Global Securities, holds a similar view: earlier this week he argued that European and Arab countries along with the Americans can easily compensate for any supply shortages, and he said that with regards to crude prices, "I'm a big believer that we are going to see $62 to $63 before we see $80."