Saudi Arabia’s King Salman and Trump affirm support for the global oil market stability

Saudi Arabia's King Salman holds phone meeting with US President Donald Trump on the need to preserve oil market stability. (SPA)
Updated 01 July 2018
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Saudi Arabia’s King Salman and Trump affirm support for the global oil market stability

  • King Salman of Saudi Arabia assured the US that the Kingdom will increase oil production
  • Oil prices have edged higher as the Trump administration has pushed allies to end all purchases of oil from Iran

RIYADH: Saudi King Salman and US President Donald Trump emphasised the need to preserve oil market stability and the efforts of oil-producing countries to compensate for any potential shortage, in a phone call reported by Saudi state media on Saturday.
The statement did not mention any intention by Saudi Arabia, the world’s top oil exporter, to raise production to 2 million barrels per day. Trump said in a tweet he had asked the king for such an increase and the king had agreed.

During the phone call, they also discussed the distinguished relations between the two countries, as well as regional and international developments. 

Oil prices have edged higher as the Trump administration has pushed allies to end all purchases of oil from Iran following the US pulling out of the nuclear deal between Tehran and world powers. Oil prices also have risen with the ongoing unrest in Venezuela, as well as with fighting in Libya over control of that country’s oil infrastructure.
Last week, members of the Organization of the Petroleum Exporting Countries cartel led by Saudi Arabia and non-cartel members agreed to pump 1 million barrels more crude oil per day, a move that should help contain the recent rise in global energy prices. However, summer months in the US usually lead to increased demand for oil, pushing up the price of gasoline in a midterm election year. A gallon of regular gasoline sold on average in the US for $2.85, up from $2.23 a gallon last year, according to AAA.
Trump’s comments came Saturday as global financial markets were closed. Brent crude stood at $79.42 a barrel, while US benchmark crude was at $74.15.
Saudi Arabia currently produces some 10 million barrels of crude oil a day. Its record is 10.72 million barrels a day. 

China is the largest importer of Iranian oil with 24 percent, followed by India with 18 percent. Turkey stood at 9 percent and Italy at 7 percent.


Volvo quits Iran as US sanctions pressure mounts

Updated 25 September 2018
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Volvo quits Iran as US sanctions pressure mounts

  • Volvo cannot get paid in Iran due to US sanctions
  • Plans were for at least 5,000 trucks to be assembled in Iran Saipa Diesel says zero Volvo trucks assembled since May

STOCKHOLM, Sweden: Swedish truck maker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.
The sanctions against Iran, reimposed on Aug. 6 by US President Donald Trump after his decision to pull out of a nuclear deal with Tehran, have forced companies across Europe to reconsider their investments there.
Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran in another blow to the country’s car industry, which unlike the energy and banking sectors, had managed to sign contracts with top European firms.
“With all these sanctions and everything that the United States put (in place) ... the bank system doesn’t work in Iran. We can’t get paid ... So for now we don’t have any business (in Iran),” Ivarsson told Reuters by telephone.
Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Gulf region and North Africa markets.
The European Union has implemented a law to shield its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.
Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.
Ivarsson said Volvo had no active orders in Iran as of Monday.
A commercial department manager at Saipa Diesel confirmed that sanctions had prompted Volvo Trucks to terminate their partnership agreement.
“They have decided that due to the sanction on Iran, from (May) they couldn’t cooperate with us. We had some renovation planned in Iran for a new plant but they refused to work with us,” said the manager, who declined to be identified.
More than 3,500 Volvo trucks had been assembled by Saipa Diesel in the year to May, but none had been assembled in this financial year although the original deal was for at least 5,000 trucks, the manager told Reuters.
Swedish truckmaker Scania, which is owned by Volkswagen , said it had canceled all orders that it could not deliver by mid-August due to sanctions, while French carmaker PSA Group began to suspend its joint venture activities in Iran in June.
Germany’s Daimler has said it is closely monitoring any further developments, while carmaker Volkswagen has rejected a report that suggested it had decided against doing business in Iran.