Saudi Arabia will not act unilaterally to increase oil supplies following renewed US sanctions on Iran’s energy industry, a Gulf source familiar with Riyadh’s thinking said, with any rise in output to be co-ordinated with Russia and other producers. The comments, which came as oil crested $77 a barrel for the first time since 2014 on fears of a drop in Iranian exports, are a signal that the Opec kingpin is not willing to turn its back on a growing energy alliance with Russia, with which it has worked since early 2017 to manage output and help prices recover.
“Any action will be taken in co-ordination with other producers,” the person said on Wednesday, adding that Saudi Arabia was already in talks with Russia and other producers, including the UAE. Khalid al-Falih, the kingdom’s energy minister, confirmed the move on Twitter, saying Saudi Arabia would “work closely” with big Opec countries and those outside the cartel to “mitigate the effects of any supply shortages”. The US Treasury said on Tuesday it was not concerned about a price jump following Washington’s decision to withdraw from the Iran nuclear deal because it had spoken with oil producers, assumed to include its ally Saudi Arabia, about keeping markets well supplied.