OPEC member Saudi Arabia announced it had cut its oil output by an average of 200,000 barrels per day last month – a move designed to increase demand in an increasingly chaotic oil industry.
The US is burying Iran under increasingly harsh sanctions with the aim of reducing their oil exports to nil, while Venezuela, another major oil-exporting country, has also seen its output drop due to economic instability.
OPEC said in its monthly report it was pleased with the “currently trajectory” of oil prices.
They said: “Compared to a year earlier, there has been an overall improvement in crude oil prices in 2018.
“At the same time, product prices have generally followed the upward trajectory of crude oil prices.”
It comes after US oil prices fell today, with Brent crude off 25 cents at $ 72.56 a barrel and US crude 21 cents lower at $ 67.43.
The US is embroiled in a growing trade war with China, something experts have warned could come back and bite the American oil industry.
Suresh Sivanandam, Asia refining senior manager at Wood Mackenzie, warned: “From the US perspective, China is a significant market, but US shipments are just 3% of Chinese imports.
“There’s more of the US losing out here than China.”
This, OilPrice.com said, could see US oil producers forced to offer discounts on their goods in order to keep sales stable.
The economic chaos in Iran has led to protests in cities and towns. Often beginning with slogans against the high cost of living, high prices and a lack of jobs, they have then quickly turned into anti-government rallies.
Mr Trump reimposed the sanctions after pulling the US out of an international accord that aims to curb Iran’s nuclear programme. He said the deal was not working and also has said Iran must stop meddling in conflicts in Syria and Yemen.
The sanctions prevent Iran from trading in gold and precious metals. They also ban purchases of U.S. dollars by Iran and sanction its automotive sector.
Unless Iran’s clerical rulers comply with the U.S. demands, more sanctions targeting Iran’s oil and shipping industries are set for November.